MTN Group Anti-Terrorism Act Lawsuit Adds Strain to US-South Africa Ties

Just a day after President Cyril Ramaphosa announced the appointment of MTN Group chairman Mcebisi Jonas as South Africa’s new Special Envoy to the United States, the US District Court for the Eastern District of New York gave the green light for a high-profile Anti-Terrorism Act lawsuit against the African telecoms giant.

The lawsuit, brought by over 50 American plaintiffs, alleges that MTN and other tech companies did business with Iran’s Islamic Revolutionary Guard Corps (IRGC) — a designated terrorist organisation — knowing their support could fund attacks that injured or killed Americans between 2011 and 2016.

LegalBrief Africa reported on Wednesday that the court’s decision allows the case to proceed to the discovery stage, where evidence from both parties is submitted. MTN has already filed an appeal, setting the stage for what could become a landmark legal battle in both US and African corporate history.

Diplomatic Fallout

The timing could not be worse. Jonas’ appointment was intended to help thaw increasingly chilly relations between the US and South Africa. But critics are pointing out the complications: in 2020, Jonas called then-President Donald Trump a “racist” and a “rightwinger” during a public lecture, remarks that are now being resurfaced in American media.

More controversially, Jonas is also chairman of MTN, the very company now facing scrutiny for its alleged dealings with the IRGC and its continued operations in Iran — a nation under multiple sanctions from the US and international bodies.

Presidential spokesperson Vincent Magwenya downplayed the controversy, saying Jonas made those comments as a private citizen and not in his current role. He also confirmed that Jonas’ appointment wasn’t subjected to the same level of scrutiny as that of an ambassador, but said his experience as a former Deputy Finance Minister made him suitable for the role.

US Trade and Political Pressure

The lawsuit also emerges amid broader US legislative discussions about potentially severing ties with South Africa. Some analysts warn that if the lawsuit and Jonas’ appointment are not addressed diplomatically, they could trigger sanctions against South African companies, officials, or trade sectors.

US foreign policy analyst Michael Walsh said Jonas’ controversial history is harming US commercial and diplomatic interests. He warned that the ripple effects could affect major American companies with operations or partnerships in South Africa, such as Meta and Microsoft. MTN recently announced a partnership with Meta to improve call quality on apps like WhatsApp in 12 African markets.

“Even companies that aren’t directly involved with MTN might feel the pressure,” said Walsh. “There will be increasing shareholder, media, and government scrutiny of US business links with South Africa.”

MTN’s Legal Woes Continue

This isn’t MTN’s first legal challenge linked to Iran. The Supreme Court of Appeal in South Africa is still deliberating on whether Turkcell can proceed with a $4.2 billion case against MTN for allegedly bribing Iranian and South African officials more than a decade ago to secure a telecoms license. Turkcell also claims MTN urged South African officials to support Iran’s nuclear development program in exchange for business favours — accusations that MTN strongly denies.

A Turkcell legal team spokesperson stated that evidence had not yet been presented in court.

Despite not operating directly in the US, MTN’s collaborations with US-based firms mean it cannot remain untouched by American legal and diplomatic developments.

High Stakes for South Africa

As diplomatic pressure mounts, political leaders in South Africa are calling for more caution. Ryan Smith, Deputy Spokesperson for Foreign Relations in the Democratic Alliance, acknowledged Jonas’ business credentials but said, “We need to be extremely pragmatic about who we send to Washington, especially when our trade relationship is already on shaky ground.”

For now, the MTN lawsuit remains a flashpoint — not just for the company, but for South Africa’s already delicate standing with one of its biggest global trading partners.

{Source: IOL}

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