Iraq’s Communications and Media Commission (CMC) has transferred a 44% stake in mobile provider Korek Telecom from Iraq Telecom – a joint venture of France’s Orange Group and Kuwaiti logistics firm Agility – to local investors via an administrative order, Bloomberg writes, citing documents seen by the news agency and dated to March this year. The stake was transferred to three investors, including Iraqi Kurdish businessman and Korek Managing Director Sirwan Barzani, who now reportedly controls 75% of the cellco’s shares. The order is the latest development in a years-long dispute between the regulator and the two shareholders. A spokesperson for the French group was quoted as saying: ‘The shareholding owned by Orange and Agility has been unlawfully expropriated and Orange will continue to take all steps to seek full compensation for this act’. Agility, meanwhile, stated that it had ‘multiple legal proceedings’ underway in Dubai, New York and before the World Bank’s International Centre for Settlement of Investment Disputes to try to recover its holding.
As noted by TeleGeography’s GlobalComms Database, Orange and Agility had purchased their stake in the operator in 2011, but in 2014 the CMC notified the company that it was cancelling the tie-up and reverting Korek’s shareholding structure to its pre-2011 form, on the basis that conditions relating to investment and network construction imposed by the regulator on the joint venture had not been met. Orange and Agility challenged the order, and the latter kicked off international arbitration proceedings in early 2017. More recently, in March 2018 the joint venture filed a complaint accusing Korek’s directors of misappropriating millions of dollars, claiming that the executives had been syphoning funds from the telco to pay CMC officials.