MTN shares dip on new allegations it paid terrorist groups

MTN Group shares fell slightly on Monday after reports emerged that it was facing further claims in a US court that it paid protection money to terrorist groups in Afghanistan.

Media reports began emerging on Saturday that the telecommunications group is facing new allegations of aiding the Taliban and al-Queda in the war-torn Middle Eastern country, where MTN operates a mobile network.

MTN shares dipped by more than 4.6% in intraday trading on Monday morning as investors absorbed the news, but they later regained some composure. As at 1.32pm in Johannesburg, they were trading just 0.8% lower at R57.76 apiece.

The new allegations build on a lawsuit filed against MTN last December, in which it’s alleged the group paid protection money to the Taliban in Afghanistan, endangering the lives of US servicemen and women.

The suit was filed in a Washington, DC court on 27 December 2019 on behalf of American service members and civilians, and their families, who were killed or wounded in the troubled Middle Eastern country between 2009 and 2017.

The complaint alleged that several Western businesses supported the Taliban by making payments to ensure the protection of their infrastructure — in MTN’s case, its cellphone towers. The Taliban is an Islamic fundamentalist group waging a religious war, of jihad, in Afghanistan.

Amended complaint

IOL reported that the new, amended complaint was filed on Friday by Washington-based law firms. The amended complaint alleges that MTN violated the US Anti-Terrorism Act by paying protection money of more than US$100-million to al-Qaeda and the Taliban so its cellular towers would not be destroyed.

In April, MTN filed a motion to dismiss the matter in the US court. It said at the time that the case shouldn’t be allowed to proceed because the court lacked jurisdiction over MTN and because the complaint did not allege any conduct by MTN that would have violated the Anti-Terrorism Act.

“Put simply, the plaintiffs have sued the wrong defendants in the wrong court based on insufficient allegations,” it said then.

MTN Group CEO Rob Shuter said at the weekend of the expanded court challenge: “We are reviewing the new material in consultation with our legal advisers but remain of the view that we conduct our business in a responsible and compliant manner in all our territories.”  — (c) 2020 NewsCentral Media