Mcebisi Jonas, MTN chair and President Cyril Ramaphosa’s special envoy to the US, has broken his silence, slamming what he has called a relentless campaign led by well-connected people in the country to render South Africa a pariah state.
He spoke in the same week MTN said it was the subject of a US department of justice (DOJ) grand jury probe into its dealings in politically sensitive Iran and Afghanistan. The investigation is seen as likely to further damage the already fractious relationship between Pretoria and Washington, which has led to President Donald Trump imposing 30% punitive tariffs on a wide range of South Africa’s exports to the US.
Jonas, who has reportedly been refused a visa to enter the US, said he was not daunted by the campaign being waged against him, as his work as special envoy was mainly behind the scenes, and therefore different from that of a diplomat. He vowed to continue in the role.
The scale of the information war ... make[s] the Bell Pottinger project look like a Sunday school picnic
— Mcebisi Jonas, MTN chair
“I have been focusing on my work rather than the attacks. I will not shy [away] from contributing to a solution.”
He characterised the attacks as “dirty tricks, defamatory allegations and treasonous actions of certain South Africans [that] must be challenged”.
“The scale of the information war, the nefarious characters involved, their command of resources and their stranglehold over decision-making in South Africa under their cloak of legitimacy make the Bell Pottinger project look like a Sunday school picnic. They have created the perfect storm, and we are caught in the vortex.”
The mobile operator is being investigated in connection with the alleged activities of its former subsidiary in Afghanistan and its 49% shareholding in mobile operator Irancell in Iran. Among the claims being investigated is that MTN paid protection money to militant groups in Afghanistan and dished out bribes to secure its licence in Iran.
In reaction to the news of the investigation, MTN’s share price dropped 10% in intraday trading. The company has said it is co-operating with the DOJ probe.
Reacting to a claim by a right-wing US-based online publication, National Security News, that he is under criminal investigation by the US, Jonas ascribed the latest attacks on him and escalating tensions between Pretoria and Washington to “domestic actors acting in concert to increase pressure and punitive actions against South Africa”.
“These non-state actors have appointed themselves as spokespeople and negotiators on behalf of South Africa to service certain political and business interests, and are attempting to usurp authority over our foreign policy.
“They prey on the issues that divide us and our internal weaknesses to render South Africa a pariah state,” he said.
Jonas has of late been the face of the deteriorating relations between Pretoria and Washington. Shortly after Ramaphosa made him investment envoy, a video from 2020 surfaced in which he was seen describing Trump as a “racist,” a “homophobe” and a “narcissistic right-winger”. He later clarified that the comments were made in a previous era when he was an activist.
The DA’s former international relations spokesperson, Emma Powell, issued a statement in July claiming Jonas had been denied a diplomatic visa by the US administration in May and had his credentials rejected.
The Presidency, through spokesperson Vincent Magwenya, responded angrily, accusing the DA of “positioning itself as part of a right-wing nexus” that was aiming to undermine the country.
The Sowetan newspaper quoted an intelligence report it obtained in July that said Powell had used her visit to the US capital to spread false information that contributed to a negative perception of South Africa.
Attempts to link MTN to Taliban militants, as well as accusations that it bribed members of Iran’s revolutionary guard, are likely to fuel further tensions with the US
Powell also found herself taking flak for a March visit to Washington with DA colleague Andrew Whitfield, who was subsequently fired by Ramaphosa as deputy trade, industry and competition minister for undertaking the trip.
She has denied the trip was funded by André Pienaar, the South African founder of the Good Governance Group, a cybersecurity venture with close ties to conservative think-tanks in the US.
Jonas’ chairing of MTN has also been cited in relation to the company’s legal woes in the Middle East.
The terror-funding claim has been hanging over Africa’s biggest mobile operator for almost five years after the families of more than 200 US soldiers killed and wounded in Afghanistan — which the US invaded in the early 2000s to topple the Taliban — claimed it had paid protection money to the Islamist movement and helped its fighters evade being detected by counterinsurgency forces.
At the same time, Turkish group Turkcell has accused MTN of paying bribes to South African and Iranian officials to secure 49% of Irancell in 2005. The Iranian company gave MTN a licence to operate in the country. Turkcell is demanding $4.2bn (R73.29bn) in damages.
Attempts to link MTN to Taliban militants, as well as accusations that it bribed members of Iran’s revolutionary guard, are likely to fuel further tensions with the US.
With South Africa’s major exports to the US now subject to a 30% tariff, the department of trade, industry and competition has been pushing to strike a bilateral trade deal to avoid job losses in crucial industries, including the automobile and vehicle components manufacturing, citrus and wine export sectors.
South Africa has also been seeking alternative markets for its exports in regions with low- or zero-tariff barriers. Speaking at the Tokyo International Conference for African Development in Japan this week, Ramaphosa said fairer market access was critical for African countries that faced greater trade barriers from the US.
“South Africa is a leading exporter of agricultural produce and high-quality industrial products such as auto vehicles and components. We call on our Japanese counterparts to support tariff co-operation to ease market access for African goods,” Ramaphosa said.
Jonas, a former deputy minister of finance, made headlines in 2016 when it was revealed he had declined a R600m bribe from the Gupta family to help it loot up to R8bn at the height of state capture.
He became MTN executive chair in 2018. Yesterday he said the company’s legal issues in the US and the Middle East preceded his time on the board.
MTN Group CEO Ralph Mupita said this week that the company had taken a decision to make an orderly exit from the Middle East “because we believe we don’t have the unique advantage of being in the Middle East”. He added, “We understand Africa well — we know how to allocate capital, well, to manage the risks.
All I can say from an investment [perspective] is that this issue is likely to be an overhang on the shares, and MTN does not have much control over both the legal and political processes to resolve issues sooner
— Peter Takaendesa, chief investment officer at Mergence
“So we abandoned Syria after being frustrated by former president Assad’s regime. It made it difficult for us to operate. We sold Afghanistan for next to nothing [and] sold Yemen for $1 because we said to ourselves, ‘This is not a place where we have capability, [where] we have unique skills, and there’s no advantage for us to be here,” Mupita said.
A company insider, who asked not to be identified, told the Sunday Times its own intelligence showed MTN was the victim of anti-South Africa sentiment that worsened when the country took Israel to the International Court of Justice for its military campaign in Gaza.
“The people who were incensed are in South Africa, they are in the US, [and] they are in Israel. MTN has become a useful football to express that frustration and anger against South Africa. People are telling us, ‘You guys are caught in a geopolitical storm that has nothing to do with you’,” the insider said.
Analyst Makwe Masilela of Makwe Fund Managers said while investors did not like dark clouds hanging over a company, he hoped the executive management would learn from what he described as an “unnecessary and avoidable court battle”.
Masilela said Jonas should be judged on the basis of how he was performing as chair in territories where the company was generating handsome revenues, rather than in terms of how the US views him.
“And so far, to my knowledge, he has a good standing in those territories,” he said.
Peter Takaendesa, chief investment officer at Mergence, said: “All I can say from an investment [perspective] is that this issue is likely to be an overhang on the shares, and MTN does not have much control over both the legal and political processes to resolve issues sooner. The group can only prepare to fight hard legally and avoid any significant fines that [could] impair the balance sheet while continuing to exit operations in [the] highest-risk regions.”
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