By Nicholas Bariyo
KAMPALA, Uganda--More than a dozen executives at Uganda's
largest telecoms company, MTN Uganda Ltd. are facing trial over tax
evasion amounting to at least 70 billion Ugandan shillings ($27
million) in one of the largest tax scams in the country's history,
officials said Tuesday.
Last week, a Ugandan magistrate's court in Kampala issued
criminal summons to a number of MTN executives including Sifiso
Dabengwa, chief executive of Johannesburg-listed MTN Group Ltd.
(MTN.JO), MTN Uganda's parent company. The trial is expected to get
underway this week.
The lawsuit, in which MTN officials are accused of false tax
declarations and conspiracy to falsify declarations was filed early
this month by Naphtali Were, a former logistics officer with MTN
Uganda.
However, MTN Uganda Chief Executive Mazen Mroue described the
accusations against the company as "vague and baseless" accusing
Mr. Were of a witch hunt following Were's dismissal from the
company in September over suspected fraud.
"In mid-September, MTN Uganda discovered suspicious supply chain
payments made to several service providers...This resulted in the
charging of two staff members implicated in the investigation," Mr.
Mroue said in an emailed statement to Dow Jones Newswires.
"MTN has been advised that one of the persons implicated in the
supply chain fraud has made allegations against the senior
management. MTN lawyers are looking into the vague and baseless
allegations," Mr. Mroue said.
According to court documents, Mr. Were's lawyers say that the
telecom company declared nil taxes for several months through false
declarations, costing the East African nation millions of dollars
in lost revenue.
With around 7 million subscribers, MTN controls around 50% of
Uganda's telecoms market.
It isn't the first time the company is facing accusations from
former employees. Earlier this year, MTN Uganda Ltd. was accused of
using underhand methods to wrestle a lucrative mobile phone license
away from Turkey's Turkcell. Turkcell has filed a $4.2 billion
lawsuit against MTN in a U.S. court.
Under Ugandan law, any person can initiate private prosecutions
against a company or individual implicated in a crime, however, the
director of public prosecutions reserves the right to takeover the
prosecution of such a case at any stage.
Write to Nicholas Bariyo at nicholas.bariyo@dowjones.com
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