Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.

Business of Tech

Judge recommends dismissing MTN Afghanistan terrorism complaint

Article Image
MTN Afghanistan looks set to put a lingering terrorism complaint behind it, after a US magistrate judge recommended that the case be dismissed.

The MTN group announced the update to the long-standing court case as part of a trading statement ahead of its first half (H1) results release next week, also admitting it expects H1 earnings to drop.

The December 2019 complaint, made to a District of Columbia court, was filed on behalf of American service members and civilians, and their families, who were killed or wounded in Afghanistan between 2009 and 2017. The complaint alleged that MTN and other Western businesses violated the US Anti-Terrorism Act by making payments to the Taliban to ensure the protection of their infrastructure.

MTN Group and two of its subsidiaries, MTN Dubai and MTN Afghanistan (MTN Defendants), asked a US court to dismiss the case for two reasons: because the court lacks jurisdiction over MTN, which does not operate in the US; and because the complaint does not allege any conduct by MTN that violated the Anti-Terrorism Act.

MTN said that on July 30, 2021, the magistrate judge made a recommendation to the district judge presiding over the case to grant the motion to dismiss for all defendants in the case, including MTN Defendants.

"We welcome the recommendation by the magistrate judge to dismiss the case on the grounds of lack of jurisdiction as well as the complaint not alleging any conduct by MTN Afghanistan that violated the Anti-Terrorism Act," said MTN Group President and CEO Ralph Mupita in an emailed statement.

"Across our territories, we conduct our business in a responsible and compliant manner. We will continue to defend our conduct and reputation where necessary, in this regard," he added.

"Under the US court's procedures, the plaintiffs are permitted to file objections to the report with the district judge, and MTN Defendants will have an opportunity to respond," the group said in a statement.

The Afghanistan issue is one of several headaches the Johannesburg-headquartered group is facing in the Middle East, a region it has decided to exit over the medium term.

Other problem children in the MTN portfolio include Syria where its business was placed under a judicial guardianship in February 2021 and its Iran business which has for years struggled to repatriate cash back to South Africa due to US sanctions.

Earnings drop expected

The MTN trading statement also said it expects earnings per share (EPS) to drop by between 75% and 85% for the six-month period ended June 30, 2021.

The EPS drop was because of losses related to MTN Yemen (largely non-cash losses from the deconsolidation of subsidiary MTN Syria), in addition to a gain on the fair value of the group’s investment in micro-insurance venture aYo.

Headline earnings per share (HEPS) would also likely be down by between 5% and 15%, "negatively impacted by a number of non-operational and once-off items" like foreign exchange losses and COVID-19 related donations.

Some good news was that MTN had made some progress in repatriating cash from a number of its operating companies, R9.3 billion ($645 million) worth to be exact, with R4 billion ($278 million) being "upstreamed" from MTN Nigeria.

MTN expects to publish its first half results for 2021 on August 12.

Related posts:

*Top image source: warrenski on Flickr CC 2.0

— Paula Gilbert, Editor, Connecting Africa

Innovation hub

Story

Connecting Africa Podcast: Ep. 3 – Startups, funding and failing fast with Zachariah George

This week the team chats to Startupbootcamp AfriTech Co-Founder Zachariah George about venture capital and angel investing in Africa and what he is looking for in the next generation of tech startups.

Story

Orange opens Digital Centers in Côte d’Ivoire and Cameroon

Orange has launched two new Digital Centers, one in Côte d'Ivoire and another in Cameroon, with plans to open more in Africa this year and into 2022.

More Innovation hub

Latest video

More videos

Guest Perspectives

Story

Omdia View: September 2021

By Omdia Analysts

This month's Omdia View covers Africell's Ugandan exit and MTC's Namibian stock exchange IPO; as well as Netflix's free Kenyan offering and a new broadband service in SA from Multichoice and MTN.

Story

Omdia View: August 2021

By Omdia Analysts

Omdia's analysts provide context and analysis about MTN's decision to exit Syria and not bid again for an Ethiopian license, as well as 5G news from Mauritius, Ghana, Mayotte and Reunion.

More Guest Perspectives

Partner perspectives

All Partner Perspectives

AfricaCom perspectives

Story

Digital inclusion as a catalyst for economic empowerment: Mastercard's Imelda Ngunzu

Mastercard's Imelda Ngunzu talks to Connecting Africa about how digital payment solutions and mobile money are transforming the lives of small business owners, women and marginalized groups in East Africa.

Story

Accelerating women in STEM: In conversation with GirlCode's Tinyiko Simbine

GirlCode co-founder and CFO Tinyiko Simbine talks about why it's important to help girls and young women excel in science, technology, engineering and mathematics (STEM) fields.

Story

How Poa Internet is unlocking meaningful connectivity in East Africa

Poa Internet's CEO Andy Halsall shares his views on what it takes to develop last-mile connectivity and get Africans online in a meaningful way.

More AfricaCom perspectives

Upcoming events

More Upcoming events

Flash poll

All polls

Upcoming webinars

Meeting SME’s where they are - Building inclusive ecosystems for Africa’s small business owners

Micro and small businesses have been, and still are, the spine and lifeblood of the African economy, making up 90% of businesses on the continent.

Many of these businesses have still been operating in traditional ways and serving non-digital customers. With Covid-19 expediting the digital transformation process, businesses - big and small - have been forced to adapt to operate successfully in a more digital-first environment.

To ensure that the digitalization of Africa’s market doesn’t leave micro and small businesses behind, digital solutions must be inclusive and create business-ready environments. But how can we ensure that African SMEs become digitally enabled?

In this webinar we will share from our own experience on how to create such an environment, and the actions we took in vcita to get there, including:

  • Closing the digital literacy gap through tech inclusion 
  • Making a positive impact on local communities
  • Building the foundations for digital inclusion and small business growth in a technology-accelerated world
  • Building the foundations for digital inclusion and small business growth in a technology-accelerated world

Register Here >>

More Webinars

Sponsored video

More videos

Like us on Facebook

Newsletter Sign Up


Sign Up