Probe into MTN bribery claims may hit snags
The daughter of the judge appointed by MTN to head a "fiercely independent" committee of inquiry into company bribery allegations in Iran used to work for the JSE-listed company.
The Hoffmann committee was established in February to probe the bribery allegations after Turkish cellphone operator Turkcell filed a lawsuit in a US court alleging that the SA multinational had paid bribes to secure an operating licence in Iran in 2004.
Jenny Hoffmann, the daughter of Judge Lord Leonard Hoffmann who is leading the inquiry, was employed as chief executive of MTN Banking for nine months between 2005 and 2006.
MTN Banking was a division that fell under the company's then commercial director Irene Charnley, which means that she reported directly to Charnley.
This raises serious questions about Judge Hoffmann's conflict of interest and the committee's credibility as Charnley - together with former MTN chief executive Phuthuma Nhleko - are implicated in the bribery scandal.
Former MTN director in Iran, Chris Kilowan, alleged in court documents before a US court that Charnley had approved a US$200,000 (about R1.7-million) payment to South Africa's former ambassador to Iran, Yusuf Saloojee. Kilowan is testifying on behalf of Turkcell, which is suing MTN for US$4.2 billion (about R45,7-billion).
When announcing the committee to lead the inquiry in February, MTN chairman Cyril Ramaphosa said the committee would probe the allegations in depth and recommend appropriate action.
"This committee will comprise non-executive members of our board, and will be chaired by Lord Hoffmann," Ramaphosa said. "I am confident that he will bring a fiercely independent perspective to the process."
But Ramaphosa never disclosed to the shareholders - and the public - the relationship between Judge Hoffmann and his daughter Jenny, who is now based in the UK, where she runs a risk solutions company that is focused on the use of mobile technology to make innovative payments.
Her business, Risk Frontiers, boasts MTN adverts on its website. One such advert is for Ubuntu Point MTN, a Channel Life initiative, supported by Pactel, Big Box Containers, MTN and MTN Banking.
MTN spokesman Paul Norman defended the Hoffmann Committee.
"Lord Hoffmann declared on his appointment to head the MTN inquiry that his daughter had been employed by MTN Mobile Money Holdings for approximately 10 months in 2005/2006," said Norman.
"MTN Banking is a joint venture between Standard Bank and MTN. In this role, Jenny Hoffmann had no links or involvement in Iran, nor in MTN's interests in Iran."
"On this basis, other members of the Hoffmann Committee judged there was no potential or real conflict," he said.
Rhodes Business School professor Owen Skae said in terms of good corporate governance, should anything be perceived as having a conflict of interest it might create problems for the committee of inquiry.
"I can't comment on the merits and demerits of the matter, but in terms of good corporate governance, a relationship of this nature should have been disclosed," said Skae.
Institute of Directors chief executive Ansie Ramalho said there would be nothing untoward about the committee if Jenny Hoffmann was not linked to the investigation.