Legal expert suggests MTN financial statements misrepresent risk of US terrorism cases

By Michael Walsh

There are concerns that MTN Group may have misled its shareholders about the nature of ongoing terrorism litigation in the United States in the recently published Annual Financial Statements for the year ended 31 December 2024.

The Annual Financial Statements names five active legal cases related to the Anti-Terrorism Act (ATA) against MTN Group in US courts, and its Director's Report declares that each of those cases has “been assessed as remote and therefore no contingent liabilities have been disclosed.”

The Annual Financial Statements were authorized by the MTN Board of Directors on 17 March 2025. The Chairman of the MTN Board is Mcebisi Jonas, the newly appointed South African Special Envoy to the United States.

Professor Jeffrey Breinholt of George Washington University helps to shed light on why the Director’s Note could pose problems for MTN Group and, by extension, the Government of South Africa.

Breinholt is a former US government official who spent over two decades working on counterterrorism and national security law in the US Department of Justice. He is also the editor of “Pursuing terrorists in US civil courts: the Encyclopedia of ATA cases.” 

According to Breinholt, the biggest challenge facing plaintiffs seeking to bring ATA cases against multinational corporations is to “get over the motion to dismiss” the case as “frivolous.” 

Breinholt points out that the plaintiffs have already gotten over that motion to dismiss MTN Group in the case of Zobay, et al. v. MTN Group Limited, et al.

Since MTN Group did not win that legal argument, Breinholt says that it is not only “disingenuous” for the Director’s Report to “claim that the risk is so remote that they don’t have to report contingent liabilities.” He says that “any claim that these cases are remote is probably wrong.”

Breinholt advises that the Annual Financial Statements therefore carry serious implications for MTN Group and its shareholders.

“The implication is (that MTN Group committed) securities fraud - that they are lying on their financials,” says Breinholt, “and that would affect their shaheloder value” as it would “overvalue the company.” So, “the shareholders would be aggrieved.”

Since the Director’s Report has “opened [MTN Group] up to fraud allegations,” Breinholt stresses “you would think that the law firm representing them” in the ongoing terrorism litigation in the United States “would have reviewed” the Annual Financial Statements before they were authorized by the Board of Directors.

One of those law firms is Covington & Burling LLP. 

The law firm has long had a connection with MTN Group. Eric Holder is one of its senior counsels. He served as the Attorney General of the United States under the Obama Administration. An Africa Intelligence report once referred to Holder as “MTN’s favorite lawyer.”

The law firm also has a problematic relationship with the Trump Administration. On 25 February 2025, President Donald Trump issued a directive that explicitly targeted Covington & Burling LLP in response to the assistance that the law firm provided to former Special Counsel Jack Smith, who oversaw the criminal investigation into the efforts to overturn the 2020 US Presidential Election.

In Washington, there is already some opposition to the appointment of Jonas as the South African Special Envoy to the United States. Any new concerns are likely to amplify that opposition. 

Prior to filing this report, Covington & Burling LLP. was asked for comment on whether their firm reviewed the Director's Report prior to its publication. No response was received.

Similarly, MTN Group was asked for comment. The MTN Group Press Office responded, “As the legal matter you referenced is ongoing, MTN Group will not be participating in interviews at this time.”

Michael Walsh is a freelance senior foreign correspondent who is a past recipient of the Vivian Award of the National Press Club.

** The views expressed herein are not necessarily those of IOL or Independent Media.

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