March 13 (Bloomberg) -- Hundreds of workers from Orascom Construction Industries protested against the Egyptian government’s accusation that the company owes 14 billion pounds ($2.1 billion) in back taxes, a charge they say threatens their livelihoods.
OCI, Egypt’s biggest publicly traded company, is due to resume talks with officials today over the tax claim, which concerns the 2007 sale of its cement business to France’s Lafarge SA. Billionaire Nassef Sawiris, OCI’s chairman, and his father, Onsi, were banned this month by Egypt’s prosecutor general from traveling and placed on an arrivals watch list. The company denies violating any laws.
The workers rallied outside the company’s Cairo headquarters, blocking traffic from a section of the corniche that leads from the banks of the Nile to Tahrir Square. Dressed in florescent yellow and orange jackets, they held banners that read: “Oh Finance Minister, where is social justice?”, “Bread, Freedom, Sawiris is not a tax evader,” and “100,000 families will lose their income.”
“By asking for this tax, the government wants to close the company and take it over,” said protester Magdi Saber, 35, who has been working at OCI since 2005. “The owner will be forced to pay for it through our livelihoods. The company is being oppressed by the government. We’re here to say: leave this man alone.”
OCI’s shares fell 4.6 percent at 1.30 p.m. in Cairo, the most in three months. That extended their decline since President Mohamed Mursi signaled the tax inspection in October to 18 percent.
OCI is in the process of transferring its shares to Amsterdam from Cairo, with Bill Gates leading a group of U.S. investors that have committed $1 billion for a stake in OCI NV, the new construction and fertilizer company to be formed. The Egyptian regulator says the company has yet to meet the requirements for relocating.
Nassef’s brother, Naguib Sawiris, has accused the Islamist government led by Mursi of creating a hostile environment for investors, and targeting his family for political reasons. He sold his stake in the ONTV television channel last year after his family said political positions taken by the broadcaster sparked the tax allegations against them.
The Sawiris family are Coptic Christians who made their fortunes in construction and telecommunications. Naguib Sawiris co-founded a secular political party after the 2011 uprising that ousted Hosni Mubarak.
“It is a shame what the government is doing to investors,” said protestor Saeed Khalaf. “Any foreign investor will be afraid to come to Egypt, if they see that this is what we do to our own people.” Girguis Azmi, a Coptic protester who said he has been working at OCI for 15 years, asked why the family is being targeted because it is Christian.
The front page of the Muslim Brotherhood’s Freedom and Justice newspaper today carried a picture of Naguib Sawiris, who is not on the Orascom Construction board, with the headline: “14.4 billion pounds is the right of the people from Orascom.”
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