VENTURES AFRICA – Nine MTN executives, including CEO, Sifiso Ndabengwa, have been called to show up in a Ugandan court to face tax-ducking charges involving $35m.
City Press, South Africa’s second biggest English Sunday paper in terms of readership, said Interpol had been ordered by the Ugandan court to serve criminal summons against current and former MTN executives.
The case came after actions by whistle blower, Naphtali Were, a former employee of MTN in Uganda, who revealed the company’s alleged tax cheating.
This is the latest scandal to hit the mobile phone giant after it was accused earlier this year of paying bribes to win an operating licence in Iran earlier this year.
This led the South African government to suspend its former ambassador to Iran, Yusuf Saloojee, amid allegations that he accepted a bribe from MTN to help the mobile-phone operator obtain an Iranian business license.
The move was part of a broader corruption case that has cast a shadow over one of South Africa’s star companies and complicated the country’s commercial ties with Iran, a large supplier of crude oil.
Saloojee was South Africa’s ambassador to Iran when MTN obtained a business license seven years ago, was suspended at the start of July.
MTN is focused on the African continent and claims to believe that through access to communication comes economic empowerment.
MTN operates three business divisions: MTN-SA (South Africa), MTN International and Strategic Investments.
It is listed on the Johannesburg Stock Exchange (JSE) under the Telecommunications Service Sector (which falls under the Industrial Non-Cyclical Services).
MTN responded to tax evasion claims in Uganda by saying these were unfounded claims of a bitter former employee who was fired last year.
Were has put the amount owed at $35 million (310 million rand), while MTN Uganda has admitted to owing the taxman 44.1 million rand ($5 million).
Friday Kagoro, a Ugandan lawyer representing Were in the matter, said the Ugandan court issued criminal summons “after ascertaining that there is a probable case of tax evasion, tax fraud and conspiracy to evade tax by the company”.
He said that “since criminal liability of a company falls squarely on its directors, the court has summoned them to plea” in the Buganda Road Magistrates’ Court on December 12 this year.