Families of U.S. soldiers sue MTN for allegedly bribing terrorists

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South African wireless carrier MTN Group Limited has been sued in the U.S. for allegedly paying bribes to stop Taliban fighters blowing up its cellphone towers in Afghanistan.

Families of almost 150 U.S. service members and civilians who were killed or wounded in attacks are accusing Johannesburg-based MTN of paying Taliban officials protection money so it didn’t have to invest in costly security for the transmission masts, according to a court document.

Africa’s largest wireless carrier chose to be an “aggressive practitioner of protection payments,” according to the suit.

It also alleged that MTN provided material support to the Taliban by deactivating its cell towers at the insurgent group’s request.

MTN is one of six contractors included in the claim, which seeks unspecified damages for the families under a U.S. anti-terrorism law.

In a statement on Monday, MTN said it is reviewing the details of the report “but remains of the view that it conducts its business in a responsible and compliant manner in all its territories.” The company “intends to defend its position where necessary,” it added.

MTN has opted over the years to enter parts of the world seen as too risky by many other carriers — countries such as Syria, Iran and South Sudan. That’s left it vulnerable to legal entanglements, unpredictable politics and regulatory crackdowns that have hit its share price.

MTN shares have declined 6.2% this year, compared with a 10% gain by the FTSE/JSE Africa Top40 Index. The stock was down 0.9% as of 4:49 p.m. on Monday in Johannesburg.

Iran’s decision to grant a licene to MTN in 2005 has been the subject of several legal claims by Turkcell Iletisim Hizmetleri AS, which was initially awarded the contract, though none have yet succeeded and MTN denies wrongdoing.

The carrier has also faced several setbacks in Nigeria, its biggest market. Authorities there have levied fines over issues ranging from non-payment of back taxes to missing a deadline to disconnect unregistered subscribers that the government said included Boko Haram Islamist insurgents.

Even MTN’s home market of South Africa has become more problematic of late, as regulators demand lower data prices to help the industry’s poorer customers.

(Bloomberg)

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