An Egyptian court will issue a final ruling on Oct. 28 that may clear Nassef Sawiris, billionaire ex-chief executive of Amsterdam-listed chemicals to engineering group OCI, in a long-running tax dispute that had unnerved investors in the country.
OCI said in a statement that final arguments were heard on Tuesday by the appeals committee of Egypt’s tax authority, which had accused Sawiris of failing to make a payment under a tax settlement reached in 2013.
OCI, parent of Orascom Construction Industries, said in January it had suspended payment of the December 2013 instalment of a 7.1 billion Egyptian pound ($993 million) tax deal with Egypt’s tax authority, pending the outcome of the broader appeal, which it hoped would involve the whole settlement being scrapped.
The original settlement was agreed in April 2013, when Islamist President Mohamed Morsi was still in office, and related to claims the company had failed to pay 14 billion pounds in taxes on the 2007 sale of Orascom Building, an OCI subsidiary, to French group Lafarge.
Before the settlement, the tax dispute with OCI had led to a souring of relations with the Morsi government. A travel ban was placed on Sawiris, a prominent member of Egypt’s wealthiest business family, and his ageing father.
The high-profile nature of the dispute had further undermined flagging investor confidence in the Morsi government.
The Egyptian army removed Morsi from power in July 2013 after protests against his rule and Sawiris decided to launch an appeal with a view to getting the settlement scrapped.
OCI said in July that a prosecutor general’s decision issued in February had cleared the firm and its management of any wrongdoing in the original tax dispute. The appeals committee’s decision in October is expected to be final.
“All previous preliminary rulings related to the tax dispute have been appealed and are pending the Appeals Committee’s final ruling on 28 October 2014,” the OCI statement said.
In the meantime, a pre-existing lawsuit filed by the tax authority against Sawiris for non-payment of the individual instalments agreed in the settlement rumbles on.
OCI, a global producer of gas-based chemicals and an engineering and construction contractor, has already paid 2.5 billion Egyptian pounds under the settlement and was due to pay a further 900 million in December, before suspending payments.
An Egyptian court confirmed a three-year jail sentence and fine against Sawiris this week in the non-payment case, a judicial source said, though Sawiris remains free pending appeal.
Source: Reuters
