Turkcell Provides Extensive Evidence to Hoffmann Commission of Widespread Corruption and Bribery by MTN in Iran - Calls Upon Lord Hoffmann to End MTN Cover Up

Jun 04, 2012, 11:18 ET from Patton Boggs LLP

ISTANBUL, June 4, 2012 /PRNewswire/ -- Turkcell (NYSE: TKC, ISE: TCELL), the leading communications and technology company in Turkey, today released its letter to Lord Leonard Hoffmann, who had requested Turkcell's cooperation in his investigation of allegations that MTN Group Ltd and its subsidiary MTN International Limited (together MTN) through corruption and bribery in 2004 and 2005 stole the Iranian second GSM license opportunity from Turkcell.  In February 2012 MTN Group announced that it had appointed Lord Hoffmann to investigate Turkcell's allegations; it remains unclear whether Lord Hoffmann's investigation is being conducted as a lawyer for the MTN Group or as an independent investigator.

Accompanying its letter, Turkcell provided Lord Hoffmann sworn testimony from a former MTN employee in Iran definitely proving that MTN paid bribes, promised assistance on nuclear issues at the IAEA and with the sale of arms to Iran from South Africa, and entered into sham agreements for payments to its Iranian partners.  The testimony authenticates each of the MTN documents attached to Turkcell's complaint in connection with its lawsuit against MTN and supports the allegations of Turkcell's claims against MTN. 

In its letter, Turkcell called upon Lord Hoffmann to publicly demand that MTN stop all efforts to cover up the investigation into Turkcell's legal claims and, citing Siemens' successful 2007 corruption investigation as precedent, Turkcell called upon Lord Hoffman to demand that MTN offer full and complete amnesty to all current and former MTN employees who have information relevant to the investigation. Turkcell identified for Lord Hoffmann MTN's multiple efforts to chill his investigation, to cover up facts of the case by intimidating witnesses, and to discourage additional witnesses from coming forward.  More specifically, Turkcell noted:

"MTN in February announced that it empowered Lord Hoffmann to undertake an independent and full investigation of the allegations," stated Read McCaffrey of Patton Boggs LLP, Turkcell's legal counsel.  "We hope that Lord Hoffmann will objectively review the extensive sworn testimony by a witness who was present for all the key events which demonstrates the truth of Turkcell's allegations and the supporting documents, as well as call upon MTN to halt its efforts to intimidate witnesses and prevent further evidence from coming forward."

A copy of Turkcell's letter to Lord Hoffmann is attached.  A copy of Turkcell's Complaint against MTN, filed in the United States District Court for the District of Columbia, can be found at the Court's PACER website.

Press inquiries should be directed to Read McCaffrey of Patton Boggs LLP, Turkcell's United States legal counsel handling the case, at + (1) 202-457-6170.


June 4, 2012


Lord  Leonard Hoffmann Committee Chairman Brick Court Chambers 7-8 Essex Street London WC2R 3LD LDE 302 UNITED KINGDOM

Dear Lord Hoffmann:

We are writing on behalf of our client, Turkcell, in response to your letter of March 19, 2012, in which you requested that Turkcell provide to you any and all information related to claims that MTN Group unlawfully engaged in bribery and corruption in the theft of the Iranian second GSM license from Turkcell.  Enclosed with this letter is a full set of each and every document (not including privileged documents which MTN's counsel requested that we return) obtained from former MTN employees from the files of MTN.  Also included is a full and unredacted transcript of the de bene esse deposition of Christian Kilowan, a former MTN employee conducted in Washington, D.C. between April 30 and May 2, 2012.  We have included Mr. Kilowan's errata list from that deposition, as well as his signature pages verifying the transcripts.

The Deposition Demonstrates MTN Engaged in Deep and Extensive Corruption and Bribery:  The deposition validated and authenticated each and every MTN document attached to the complaint Turkcell has filed against MTN in the U.S. legal proceedings.  The sworn testimony also definitively proves, from the testimony of MTN's senior executive sent to run its Iranian operations between 2004 through 2007, that MTN engaged in the bribery and corruption alleged in the complaint.  Indeed, the testimony definitively establishes that MTN went far beyond the actions alleged in the complaint to steal the corporate opportunity from Turkcell.  More specifically, the sworn testimony under oath demonstrates that:

  • MTN promised the Iranian Foreign and Defense Ministries that it would work to ensure that South Africa vote in favor (either by positive vote or abstention) of Iran at the IAEA, and that in November 2005 it did precisely that when Iran refused to deliver the second GSM license until the vote was cast;
  • MTN promised the Iranian government to assist in facilitating Iran's procurement of "the Fish" – a list of arms, and to deliver the South African Defense Minister to Iran, which it did in August 2004;
  • MTN promised and paid multiple bribes, including:
    • $400,000 to Javid Ghorbanoghli of the Iranian Foreign Ministry through a sham consulting contract with Aristo Oil,
    • ­$15,000 per month to Mr. Riahi, a senior Interior Ministry official, through a sham contract with his brother,
    • ­multiple (6) monthly $2,000 cash payments to other Iranian government officials in 2007, and
    • ­1.4 million SA Rand to South African Ambassador to Iran Yusuf Saloojee for his assistance; and
  • MTN paid its local partners through sham loans (reported on MTN's books) for the Sairan and Bonyad costs of the license fee and capitalization costs, which MTN knew at the time would never be repaid. 

We urge you to review the testimony, which is quite clear.  We further note that the testimony is from MTN's employee – not from Turkcell.  We believe the testimony will significantly advance your investigation.

We Urge You To Instruct MTN To Cease Attempting To Cover Up The Facts:  We also want to bring to your attention a very serious matter, which is MTN's effort to impede your investigation and to cover up the facts.  In investigations such as that which you are tasked with conducting, the methodology to ensure that the facts come to light is quite clear – amnesty must be offered to all current and former employees who wish to bring facts forward.  Indeed, that is precisely what Siemens did in 2007, with great success in eliminating the pervasive corruption that plagued that distinguished company.  The Siemens strategy, which has been widely publicized,[1] is the model that we believe MTN should be following.

Unfortunately, it appears that MTN has chosen to pursue a cover-up, rather than a real investigation.  From its original initial February 2012 announcement stating its "zero tolerance" policy, MTN has implicitly threatened any employee that might come forward with corroborating facts.  Following the filing of the complaint, MTN leaked Mr. Kilowan's identity to the media, labeling him as a "disgruntled employee" and otherwise slandering his name and reputation.[2]  MTN then embarked on an extensive international effort to threaten Mr. Kilowan's business associates, his former wife, and ultimately, the day before the deposition, Mr. Kilowan himself (all of which is detailed in Mr. Kilowan's testimony at pages 14 through 26, 833 through 847, and 850).  MTN not only harassed Mr. Kilowan, but made sure the world knew about it by leaking statements to the media about its pursuit of Mr. Kilowan. 

MTN's purpose was clear – to prevent Mr. Kilowan from testifying and to send the message to any MTN employee or former employee that they too are at risk if they should be as brave as Mr. Kilowan in providing evidence of what happened.  We have reason to believe that MTN's corporate culture of bribery and corruption is far more pervasive than even we were aware of at the time Turkcell filed its complaint.  To ensure the integrity of your work, we call upon you to immediately and publicly demand that MTN cease and desist from its harassment and intimidation of all witnesses to the events, and to offer full and complete amnesty to all current and former MTN employees who have information relevant to your investigation.  We further also call upon you to expand your investigation to MTN corruption in other countries beyond Iran, which will corroborate the events in Iran that have now been definitely proven.

We welcome any further inquiries that you may have, and request that you send them directly to us at the above address.


David J. Farber Read K. McCaffrey

cc:  Umit Akin, General Counsel, Turkcell


[Note 1] See, e.g., Seimens Changes Its Culture: No More Bribes; U.S. National Public Radio (May 1, 2012), available at www.npr.org/2012/05/01/151745671/companies-can-recovery-from-bribery-scandals (Interview with Siemens General Counsel, Peter Solmssen).  As reported in the transcript: SOLMSSEN: The first thing they did was that they hired an outside law firm to do a thorough investigation. And they said to the law firm: Go wherever the evidence takes you. INSKEEP: What did they find? SOLMSSEN: They found widespread corruption steered out of Germany. INSKEEP: And so then what did you do, get rid of some of the workforce? SOLMSSEN: We offered amnesty. We said for anybody who's been involved in this, if you come in and tell us the whole story, we will not fire you. We won't punish you, and we will try and help you with the authorities. And we had about 130 people who came in and told us where the money had gone and what their role had been…. Now, people who did not ask for amnesty and who were later caught were prosecuted and fired by us - first fired by us, and then prosecuted.

[Note 2] See Whistle-blower Played an Ace, Mail and Guardian (April 5, 2012), available at http://mg.co.za/article/2012-04-05-whistleblower-played-an-ace.


Turkcell is the leading communications and technology company in Turkey, with 34.5 million subscribers and a market share of approximately 53% based on December 31, 2011 results (since the Authority has not disclosed subscriber market shares for Q1 2012). Turkcell is a leading regional player, with market leadership in five of the nine countries in which it operates with its approximately 65.3 million subscribers as of March 31, 2012. The company covers approximately 88% of the Turkish population through its 3G and 99.13% through its 2G technology supported network. It has become one of the first among the global operators to have implemented HSDPA+ and achieved a 43.2 Mbps speed using the HSPA multi carrier solution. Turkcell reported a TRY2.4 billion (US$1.3 billion) net revenue with total assets of TRY17.2 billion (US$9.7 billion) as of March 31, 2012. It has been listed on the NYSE and the ISE since July 2000, and is the only NYSE-listed company in Turkey. Read more at http://www.turkcell.com.tr  


SOURCE Patton Boggs LLP