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Legal Disputes · MTN · Regulatory Risk · Share Price
MTN's share price fell over 8% in intraday trading, overshadowing a positive half-year earnings report, as investors reacted to the prospect of mounting legal challenges.
The company disclosed it is voluntarily cooperating with a US Department of Justice grand jury investigation related to its historical operations in Afghanistan and Irancell. This new inquiry adds to two existing major legal battles: a $4.2 billion lawsuit from Turkcell, alleging MTN paid bribes to secure its Irancell license in 2005, and five anti-terrorism cases in US courts.
These anti-terrorism cases claim MTN paid protection money to the Taliban in Afghanistan. CEO Ralph Mupita denies wrongdoing in all cases, citing jurisdictional defenses for the US-based claims.
Despite a strong financial performance, with headline earnings per share rising to 645c from a 256c loss a year ago, and raised medium-term guidance, the significant legal overhang and associated uncertainties led to the sharp market sell-off and no interim dividend declaration.
MTN Shares Plunge; Legal Risks Overshadow Earnings(current)
