Already negatively impacted by US lawsuit for alleged funding the Taliban in Iran, MTN Group is now reeling from the US-Iran tension.
The tension is occupying a global centre stage after the killing of Iranian General Qassem Soleimani.
The price of oil surged late Thursday after the killing of Soleimani. For more read: ‘Westerners should leave UAE immediately’: Gulf warning as British troops put at greater risk in Iraq after US kills Iran military chief
The news of the assassination of Soeimani would spook investors in MTN who have grappled against the challenges the mobile phone operator has experienced in Iran in 2018.
South African-based MTN owns 49% stake in MTN Irancell, a joint venture with Iranian government-controlled consortium.
Today the shares of MTN were trading 2.12% lower at R81.88 by 13:33 as investors react to the US-Iran tension.
In 2005, Iran’s decision to grant a license to MTN has been the subject of several legal claims by Turkcell. The Istanbul-based firm alleged that MTN made “improper payments to an Iranian and a South African government official,” during 2004 and 2005.
In 2018, MTN faced the risk of not being able to repatriate about R4.6 billion from Iran as US President Donald Trump threatened to persuade his allies in Europe to reimpose sanctions on the Middle Eastern nation.
Furthermore, MTN shares were muted after allegations the company violated the US anti-terrorism act. On Tuesday, MTN shares closed 0.74% lower on the JSE after dropping up to 1.56% on the day.
Meanwhile, MTN has vowed to defend itself against lawsuits alleging that the company paid the Taliban for protection, providing the insurgency with money that was used to attack and kill U.S. troops.
The US-Iran tension may compound MTN’s woes in the risky markets, which include Afghanistan, Syria, Yemen, Sudan and Nigeria.
The company also has operations in war-torn Syria.
MTN Syria is one of the two only mobile operators in Syria, the other being Syriatel. MTN Syria was previously known as “Areeba”. MTN owns 75% of the entity.
The South African-based telephone group has also faced several setbacks in Nigeria, Sudan, Yemen.