Orascom says Algerian police question Djezzy’s CEO
Company says has not received any new tax claim.
September 29, 2010 11:21 by Reuters
Egyptian firm Orascom Telecom said on Wednesday its Algerian unit Djezzy’s chief executive had been called in by police for questioning over allegations that the firm violated Algerian foreign exchange rules.
“The company denies performing in any way that is not in accordance with the Algerian law and the CEO of OTA (Orascom Telecom Algeria) has submitted and shall further submit clarification to this effect,” it said in a statement.
The firm also said it had not received any new tax claim from the Algerian government, after government and industry sources said Algeria planned to demand new back-taxes from the unit, known as Djezzy.
Djezzy, Orascom’s single biggest source of revenue, has been at the heart of a long dispute between the firm and Algerian authorities since it was hit with previous back-tax claims totalling over $600 million.
Orascom Telecom agreed to talks to sell the unit to the Algerian state after Algiers blocked a plan to sell it to South Africa’s MTN , saying the state had first option to buy the unit before any foreign bidder.
In Wednesday’s statement Orascom said Algeria’s central bank had alleged that certain technical assistance fees paid by Djezzy to its parent firm in 2007, 2008 and 2009 had violated foreign currency transfer rules.
“The CEO of OTA was called in by the police for investigation on allegations by the Bank of Algeria against OTA that certain technical assistance fees paid to OTH (Orascom Telecom Holding) against certain support services provided by OTH to OTA during 2007, 2008 and 2009 were not made in accordance with the relevant exchange rules,” it said.
Shares in Orascom Telecom were trading flat by 0754 GMT, while the main index was up 0.7 percent.
(Reporting by Alexander Dziadosz; Editing by Greg Mahlich)