A lawsuit based on a testimony of a disgruntled employee exposed an alleged attempt by a South African firm to win a contract in Iran, by promising to get the South African government to provide diplomatic and military support to the Islamic Republic.
The $4.2 billion dollar lawsuit was filed earlier this year in U.S. Federal Court by the Turkish cellular company, Turkcell, against South African Mobile Telephone Network (MTN). Both companies had been competing to win the license to supply Iran with a global system for mobile communication.
It's not clear yet whether the American court will agree to hear the case, but the key witness came to Washington this week, to verify documents for an deposition. If the documents prove to be authentic, they will reveal an a disturbing case of bribes used to influence the foreign policy of a large country.
In February 2004, the Turkcell consortium won an international tender for operating a cellular network in Iran, beating another contender - South African MTN. But Turkcell officials soon discovered that it was impossible to begin operations: In March 2004, the Iranian parliament launched an inquiry into the Turkcell contract. In May, the legislature passed an act, permitting foreigners to hold only 49 percent equity, instead of the 70 percent in the original Turkcell contract. The Turkish company left and in 2005 MTN jumped in to supply the Iranians with the cellular network.
The case would never have come to public attention if not Chris Kilowan, MTN's Iran operations director, who played a major role in obtaining the license. When Kilowan left the company he demanded reimbursement of the approximately $200,000 dollar bribe he allegedly paid to the diplomat who was, at the time of the cellular deal, South Africa's ambassador to Iran.
When Kilowan understood that he was not going to get the money back, he exacted his revenge. In December 2010 he provided Turkcell with incriminating memos depicting the whole process of convincing Iranian officials that MTN would be more useful to the country's leadership than the Turkish company, because the company could influence the South African vote at the International Atomic Energy Agency, broker a deal of supplying helicopters and other military equipment to Iran, despite the embargo and bring South Africa's Minister of Defense Mosiuoa Gerard Patrick Lekota to visit Tehran.
Kilowan claims the $400,000 dollar bribe was paid by MTN to the deputy foreign minister of Iran through a false contract with an oil company based in Dubai, and that several other employees in Iran's ministry of interior were each paid several thousand dollars in cash. Yusuf Saloojee, South Africa's ambassador in Tehran at the time, allegedly received payment from Kilowan's personal account. The MTN executive asked his company to reimburse him for the last cash transfer.
While MTN got the license, South Africa made good on some, but not all the promises, according to the documents. Tehran never received the military equipment, but it did get a visit by South Africa's minister of defense, and between 2005-2006 Pretoria allegedly abstained three times on UN Security Council resolutions calling for sanctions against Iran and demanding that the country comply with the non-proliferation treaty. Earlier and later on South Africa voted in favor of such resolutions.
One "highly confidential" memo, sent by Kilowan to Phuthuma Nhleko who was at the time MTN's chief executive officer, in October 2007, is particularly revealing.
"The initial feedback I received... is that once again the linkage is being made between the manner of MTN's entry and what the government here expects from the South African government.
"With the upcoming discussion in the UN Security Council about possible further sanctions the government here is obviously leaving no stone unturned to ensure that there are no more sanctions from the UNSC. The request that we have heard from all quarters that we have both been in touch with, is that the SA government must send a clear signal to them that at least the SA representative will be instructed to abstain on the vote.
"I understand you will be here over the coming weekend and you will obviously be pressed on this issue and one of the reasons that the various parties are prepared to meet with you is that they want to hear from you what MTN has been able to get as commitments from the SA government."
While MTN has opened an independent investigation over Turkcell's claims, the company has denied the claims and accused the former rival of trying to "extort money." The South African company has also cast doubt on the credibility of the key witness, Kilowan, and is hoping the U.S. Federal Court dismisses the case. One of Tukcell's attorneys in Washington, David Farber from the Patton Boggs legal firm, told Haaretz the documents and the affidavit provide a strong case, and Turkcell hopes to get compensation for profits lost as a result of the scheme.
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