Friday 22 October 2021

Court keeps freeze on Zain Iraq's $187m, firm to appeal

BAGHDAD, December 16, 2015

An Iraqi court has rejected a request by Zain Iraq to lift a freeze on $187 million it holds in cash at local bank accounts, the telecom operator's parent firm Zain said on Wednesday.

Zain Iraq, which has successfully appealed against nearly $5 billion of fines and claims in the past 12 months, will seek to overturn the latest court decision, Zain's statement to Kuwait's bourse said.

Zain Iraq's bank balances were frozen as the authorities sought to levy capital gains tax on its $1.2 billion acquisition of Iraqna in 2007. This was later merged with Zain's Iraqi unit Atheer and re-branded Zain Iraq.

Unusually, the government has tried to levy capital gains on Zain Iraq as the asset buyer, rather than on the seller, Egypt's Orascom Telecom.

Zain has brought a separate case to an Iraqi court claiming capital gains should only apply to the seller. This will be heard on Wednesday, although a decision is not expected immediately, the statement said.

In March 2015, an Iraqi court threw out a $4.5 billion claim against Zain over its acquisition of Iraqna. The claimant was not identified, although industry sources said it was rival operator Korek, which had also been interested in buying Iraqna.

Zain Iraq also successfully appealed against $262 million of fines and fees imposed after the telecom regulator found the operator had sold mobile phone sim cards without its permission and another $85 million claim relating to mobile frequencies.

Zain owns 76 percent of Zain Iraq, according to the parent firm's third-quarter earnings presentation.-Reuters

Tags: freeze | Zain Iraq |

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