Dubai: An Iraqi court has rejected a request by Zain Iraq to lift a freeze on $187 million it holds in cash at local bank accounts, the telecom operator’s parent firm Zain
said yesterday.
Zain Iraq, which has successfully appealed against nearly $5 billion of fines and claims in the past 12 months, will seek to overturn the latest court decision, Zain’s statement to Kuwait’s bourse said.
Zain Iraq’s bank balances were frozen as the authorities sought to levy capital gains tax on its $1.2bn acquisition of Iraqna in 2007.
This was later merged with Zain’s Iraqi unit Atheer and re-branded Zain Iraq.
Unusually, the government has tried to levy capital gains on Zain Iraq as the asset buyer, rather than on the seller, Egypt’s Orascom Telecom.
Zain has brought a separate case to an Iraqi court claiming capital gains should only apply to the seller.
In March 2015, an Iraqi court threw out a $4.5bn claim against Zain over its acquisition of Iraqna.
The claimant was not identified, although industry sources said it was rival operator Korek, which had also been interested in
buying Iraqna.
Zain Iraq also successfully appealed against $262m of fines and fees imposed after the telecom regulator found the operator had sold mobile phone SIM cards without its permission and another $85m claim relating to
mobile frequencies.
Zain owns 76 per cent of Zain Iraq, according to the parent firm’s third-quarter earnings presentation.
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