Billions of dollars belonging to South Africa’s MTN Group, the founding investor of Irancell, Iran’s second-largest mobile operator, remain blocked in Iran under US sanctions, the company confirmed in a recent financial update.
MTN now faces a “liquidity dead-end” in Iran after years of trying to withdraw funds, the investment analysis website GuruFocus reported on Friday.
“Our minority stake in Irancell is effectively a frozen asset,” chief executive Ralph Mupita said, citing sanctions that prevent any movement of capital.
MTN has been seeking to exit Iran since 2016, when it announced plans to pull back from the Middle East. While it once repatriated about $430 million in loan repayments and accumulated dividends between 2011 and 2016, its later attempts have failed.
The company’s difficulties deepened with US President Donald Trump’s renewed sanctions against the Islamic Republic during his second term. MTN disclosed in 2021 that it still held $204 million in Iran, largely linked to loan repayments and dividends, but no transfer has been reported since.
Mupita stressed the lack of operational influence. MTN has “zero operational control” over Irancell, GuruFocus cited him as saying, writing that sanctions have left the group powerless to access cash flow from its Iranian venture.
Partnerships under scrutiny
Irancell is majority owned by Gostaresh Electronic Sina, a subsidiary of the Mostazafan Foundation.
The foundation was established in early 1980 following the Islamic Revolution. It succeeded the Pahlavi Foundation and inherited extensive assets confiscated from the Pahlavi era.
Legally, the foundation is neither public nor private—it is a nonprofit entity that answers only to Iran’s Supreme Leader.
It is the second-largest commercial enterprise in Iran—behind only the National Iranian Oil Company—and the largest holding conglomerate in the Middle East.
The foundation controls over 350 subsidiaries and affiliates, employs more than 200,000 people, and its holdings span diverse sectors like agriculture, industry, transportation, tourism, construction materials, mining, and media.
According to the foundation’s 2016 accounts, Irancell was its most profitable asset. The operator is also a major shareholder in the ride-hailing platform Snapp.
MTN’s entanglement with sanctioned entities has drawn international attention. The group is cooperating with a US Department of Justice grand jury inquiry into past dealings in both Afghanistan and Iran, though no charges have been filed and the company says it has made no legal provisions related to the probe.
Broader repositioning
MTN has already divested from Afghanistan and continues to scale back its Middle East exposure, while scanning for growth opportunities in its home market. Mupita has pointed to South Africa’s saturated telecom sector and tighter profit margins as drivers behind potential mergers, including revived talks with Telkom SA, according to Bloomberg.
For now, MTN’s stranded billions in Iran remain a stark reminder of the risks for foreign investors entangled with the Islamic Republic. The company’s minority stake, once a prized foothold in a lucrative market, has instead become a financial liability locked by geopolitics.
