It’s World Cup time again. And for the second year in a row Orascom Telecom’s chairman Naguib Sawiris is in big economic trouble. Last week Naguib Sawiris issued an Orascom statement indicating that Algeria’s government was ready to begin discussions concerning a possible sale of Orascom’s Algerian unit, Djezzy, to MTN.
Too bad Naguib Sawiris was lying and yet again manipulating stock prices, because Naguib Sawiris then issued a separate statement announcing that talks between Weather Investments (Naguib Sawiris now controls Orascom through Weather) and MTN over the sale of Djezzy failed. As The Wall Street Journal pointed out, now Naguib Sawiris needs to sell some of the company’s assets to raise cash and settle problems with the Algerian government.
This is how the problems unfolded:
In May 2008 and again in July 2009, Orascom Telecom Algeria was informed that it was the subject of a tax audit in Algeria concerning the years 2005 to 2007. In June 2008 the audit commenced. The Algerian regulatory authorities sought a USD 596.6 tax adjustment claim for back taxes concerning the years 2005 to 2007. Yet Naguib Sawiris didn’t release this information until the day of a World Cup qualifying match between Algeria and Egypt. Not surprisingly violence broke out.
Again, this is Naguib Sawiris’s way of keeping secrets that also maintain the share price of Orascom. Not only did Naguib Sawiris hide the gigantic tax claim from his own shareholders, thereby breaching the law by manipulating the price of the company’s stocks, but by releasing the information on the same day as the heated World Cup game of Egypt v. Algeria, he used the sporting battle to make it look like Algeria was waging a political and economic attack against Egypt, as a French-language article in El Watan pointed out.
Secrecy, lies, stock manipulation, and football. What will NS do this season to celebrate the World Cup?