Shareholder complains that Iraq ‘confiscated’ stake in Orange JV
A Kuwait-based company, Agility, is complaining that the government of Iraq has “indirectly confiscated” its 54% stake in Korek, an Iraqi operator in which Orange has a 44% stake.
Agility, a logistics company with interests throughout the world, has filed a complaint with the World Bank’s International Centre for Settlement of Investment Disputes, in an attempt to settle the dispute. Agility says the investment is worth over $380 million.
Capacity has approached Orange, which bought the stake in 2011, for a comment.
According to Reuters, Agility says “Iraq had ‘indirectly confiscated’ its investment, which was worth over $380 million, and violated a bilateral protocol between Kuwait and Iraq on encouraging the movement of capital and investment between the two countries”.
Neither the agency nor Agility are providing details of how the “confiscation” took place. Korek lists the group CFO of Agility as one of its directors, along with Marc Rennard, a deputy CEO of Orange. Rennard was the Orange executive in charge of the Middle East and Africa but moved on to other responsibilities from early 2016, to be replaced by Bruno Mettling, who is not listed as a director by Korek.
Korek was set up in the Kurdistan area of northern Iraq but its licence allows it to offer services throughout Iraq – that its ability to do so has been hampered by the security situation. The circumstances of the Iraqi government’s action are still unclear.
Korek won one of three 3G licences in Iraq in 2015, and at the end of that year launched Free Basics, the free social media access service sponsored by Facebook. The company remains branded as Korek, not Orange.
The company announced in October 2016 that Ericsson had been contracted to upgrade its WCDMA core network.
Agility’s official Iraqi head office is in Basra, currently occupied by a number of militant organisations. A leader of the Iraqi Hezbollah group was assassinated in the city only yesterday, according to local reports.