South Africa’s ties to Iran could see the country hit with the “death penalty” from the United States, where local companies are axed from the US financial system.
According to Aluma Capital Chief Economist, Frederick Mitchell, this is a risk factor investors will have to consider, following the US and Israel launching attacks on Iran.
On Saturday, 28 February, the US launched ‘Operation Midnight Fury’, in which it carried out strikes on Iran that killed its Supreme Leader, Ayatollah Ali Khamenei.
The war marked a severe escalation of conflict in the Middle East, triggering global market turbulence with immediate consequences for South Africa.
“As oil prices surge, capital retreats to safe havens, and geopolitical tensions deepen, South Africa faces renewed economic pressure, compounded by strained relations with Washington and rising sovereign and corporate risk,” Mitchell said.
While the war is happening far from South Africa’s shores, the country is politically aligned with Iran—enjoying support from the ANC, which is firmly in the driving seat of international relations—while also having significant corporate exposure to the Iranian market.
Mitchell said that the current crisis highlights the mounting tension between Pretoria and the Trump administration.
“However, the deepest fracture lies in our historical and corporate ties to Tehran,” he said.
This is most notable in the MTN Iran Saga, specifically “Project Snooker”—allegations that MTN bribed Iranian officials to obtain the country’s first cellular network licence in 2004.
The saga came to light back in 2012, but fell to the back pages of business journals over the years of litigation. It came back into focus in 2025 with the rise of the Trump administration.
Mitchell said this could now move to the centre of US national security concerns.
“The allegations are grave: that in 2004/2005, MTN secured its Iranian operating licence by promising South African support for Iran’s nuclear program at the IAEA and facilitating the delivery of defence equipment, code-named ‘The Fish’,” Mitchell said.
“The fact that our current President, Cyril Ramaphosa, served as MTN’s Non-Executive Chairman during this pivotal era (2001–2013) has not gone unnoticed in Washington.”
The recent US refusal to grant a diplomatic visa to Mcebisi Jonas—MTN’s current Chairman—in his capacity as a Special Envoy confirms that the US no longer distinguishes between South African corporate interests and state policy, the economist said.
The death penalty
Mitchell said the legal jeopardy is escalating as MTN is also currently facing litigation under the US Anti-Terrorism Act (ATA).
These relate to allegations that MTN paid protection money to the Taliban to allow it to operate its former network in Afghanistan without its infrastructure being attacked.
The suits also claim that MTN was culpable in the casualties of hundreds of American soldiers and civilians while serving in Iraq and Afghanistan between 2006 and 2010.
Five lawsuits were filed against MTN in the US in 2025 related to these allegations, which the group moved to dismiss on jurisdictional grounds.
MTN has repeatedly denied any wrongdoing in these matters, but Mitchell said the risks surrounding them are staggering.
“A finding of liability would be a ‘black swan’ event for the JSE. Under the ATA, damages are automatically tripled—potentially reaching $5 billion, or around R80 billion,” he said.
More lethally, a “guilty” verdict could trigger what the economist calls the “USD Death Penalty,” where MTN is severed from the US financial system.
“Given the ‘sovereign-corporate loop’, such a blow to our largest multinational would likely trigger a credit rating downgrade and provide the US Congress with the smoking gun needed to terminate South Africa’s AGOA trade benefits, jeopardising R60 billion in annual exports,” he said.
For the MTN case, the risk outlook is “critical”, according to Aluma, with a verdict expected in late 2026. For South Africa’s position in AGOA, the risks are high, with the US mandated to review the programme by 2027.
As for the ‘death penalty’, these risks are escalating, the group said, with the fallout from Operation Midnight Fury putting secondary sanctions on SA banks into the mix.
Mitchell warned that, for South African investors, “blind optimism” is no longer a strategy.
“The geopolitical gravity has changed; those who fail to adjust their portfolios to this new reality risk being swept away by the tide,” he said.
