Orascom Says Didn’t Receive Tax Claim Amid CEOs Travel Ban
Orascom Construction Industries, (OCIC) the Cairo-based company transferring to Amsterdam, said Egypt hasn’t informed it of new tax claims after imposing a travel ban on billionaire Chief Executive Officer Nassef Sawiris.
Sawiris and his father and former Chairman Onsi were forbidden to travel and placed on an arrivals watch list, Moustafa Dweidar, a spokesman for Egypt’s Public Prosecutor’s office, said yesterday in a telephone interview. The Sawiris’ are accused of owing 14 billion Egyptian pounds ($2.1 billion) in back taxes, the state-run Middle East News Agency reported yesterday, citing an unnamed judicial official.
“The Egyptian Tax Authority has submitted a tax claim to the company to pay 4.7 billion pounds related to the sale of Orascom Building Materials Holding to Lafarge SA (LG) in 2007,” the company said on its website. “To date, the company has received no additional claim with any different tax liability.”
Orascom Construction said it filed an appeal against the claim, which is under review by the Egyptian Tax Authority’s appeal committee. The company said it’s “confident” it didn’t violate any laws pertaining to the sale and hasn’t received formal notification of a travel ban related to the sale.
The company, which has construction and fertilizer units, represents about a quarter of the EGX 30 Stock Index. OCI’s shares declined 1.7 percent to 254.85 pounds at 10:50 a.m. in Cairo, headed for the lowest close this year.
Orascom Construction sold its cement unit in December 2007 to Lafarge for 8.8 billion euros ($11.4 billion) after it was relisted on Egypt’s exchange in October of that year. The company said in a statement at the time that under law number 91 of 2005 the sale is exempt of any capital gains tax.
President Mohamed Mursi said in an Oct. 6 speech that the government is seeking to recover money owed by companies. While not identifying any company, he said one of them avoided paying tax on a profit of about 80 billion pounds from the sale of an asset by listing it on the stock exchange two months previously.
Orascom Construction is in the process of transferring its shares to Amsterdam from Cairo, giving shareholders the option of exchanging their stakes for stock in Amsterdam-based OCI NV or selling them to a group of investors led by Bill Gates’ Cascade Investments LLC for 280 pounds per share. The group, which includes Southeastern Asset Management and Davis Selected Advisors, has committed $2 billion toward buying stock.
To contact the reporter on this story: Nadine Marroushi in Cairo at firstname.lastname@example.org
To contact the editor responsible for this story: Tarek El-Tablawy at email@example.com