A Kuwaiti lower court annulled all decisions taken by the board of Zain, the country’s biggest mobile telephone company, a lawyer for a former board member who filed the case said.
The ruling was based on a lawsuit filed by former board member Sheikh Khalifa Ali Al-Sabah based on a report by the commerce ministry, which cited “violations” that took place during a general assembly meeting, the lawyer, Rashed al-Radaan, said. These violations included failing to record shareholders’ complaints and “stopping some shareholders from entering, locking the doors,” the lawyer said.
“The commercial court ruled today the annulment of the normal general assembly for Zain to elect the company’s board and all decisions based on it,” al-Radaan said in a telephone interview. “All decisions following this election are incorrect, including the Batelco/Kingdom deal.”
Al-Radaan was referring to an accord signed in April by Zain, as Mobile Telecommunications Co. is known, with Kingdom Holding Co. (KINGDOM) and Bahrain Telecommunications Co. to sell its 25 percent stake in Zain Saudi Arabia.
“This is an issue for the board of directors and shareholders,” a Zain spokesman said when asked about today’s ruling. He declined to be identified due to company policy.
The commercial court ruling is not final, the lawyer said.
Zain’s current board was elected during an annual general meeting on April 12. Sheikh Khalifa whose Al-Fawares Holding Co. owns a 4.5 percent stake in Zain, did not stand for re-election at the time.
While a board member of Zain, Sheikh Khalifa had opposed any sale of Zain to Emirates Telecommunications Corp., known as Etisalat, which in March announced the end of talks to buy a majority stake in the Kuwaiti company.
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