Zain sued for $4.5 bn over its 2007 acquisition of Iraqi telecom operator Iraqna

Kuwait's telecom operator Zain yesterday informed the stock exchange that it is being sued for $4.5 billion by an company, which it did not name, over its 2007 acquisition of Iraqi telecom operator Iraqna.

Zain had acquired Iraqna in 2007 from Egypt's Orascom Telecom for $1.2 billion and merged it with its Iraqi unit, Atheer, and renamed both Zain Iraq, which is now Iraq's biggest operator by subscribers.

Without revealing the company that Zain said had filed the lawsuit last August, the Kuwaiti telco said that the unidentified company claims that its buyout of Iraqna had stopped the firm buying Iraqna, causing it losses of $4.5 billion, Reuters reported, citing the statement filed by Zain.

The unnamed company is also suing Zain and Iraq's telecom regulator for a further $1 billion, the statement added.

Early this year an Iraqi court ruled that Zain's entire revenue deriving from Iraqna should be placed under a legal guardian and in an Iraqi bank until the case is resolved.

Zain had unsuccessfully appealed this ruling.

Zain said that it revealed some details of the court case after seeking legal advice, but added, "Zain Iraq believes its position in the case is strong as the claimant company has failed until now to produce any evidence to back its claim."