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Court maintains freeze on USD187m of Zain funds

18 Dec 2015

An Iraqi court has rejected a request from Zain Iraq to lift a freeze on USD187 million that the telco holds in cash in local bank accounts, Reuters reports, citing a statement from parent company Zain Group to the Kuwaiti bourse. The bank balances were frozen as part of attempts by the Iraqi authorities to levy capital gains tax on Zain’s USD1.2 billion acquisition of Iraqna in 2007. Zain has confirmed that it will appeal the decision. The telco has also brought a separate case relating to the acquisition, claiming that capital gains tax should only apply to the seller, in this case Egypt’s Orascom Telecom. The case was due to be heard earlier this week, but a decision is not expected immediately.

As previously reported by TeleGeography’s CommsUpdate, an Iraqi court dismissed a USD4.5 billion claim against Zain Iraq – also relating to the Iraqna acquisition – in January 2015. An unnamed claimant had argued that Zain’s takeover of the operator had prevented them from purchasing the company, causing them to suffer a USD4.5 billion loss.

Iraq, Zain Iraq

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