The Untold About Orange Telecom Predicaments in Iraq
Will they win this case? Will the corrupt entities in Iraq give them justice? As the legal battle continues to intensify between the renowned French Orange Telecom and the Korek, a telecommunication firm in Iraq, all investors across the globe who were eyeing Iraq as their next investment hub are carefully watching.
Effects of Orange Predicaments on Other Foreign Investors
There is a lot that Orange Telecom and Agility’s Investment which is a Kuwait firm has gone through that people are not talking about. Having invested their billions in the nation, they end up being pushed away and losing their share in Korek through dubious and lawless acts.
That could be the reason why they have moved to court to seek justice. But will they really get justice and perhaps the compensation they are looking for? Well, only time can tell that. There is much hesitation among the western countries from investing in Iraq after seeing this post-conflict market and unfair ways of pushing other competitors out of the country.
Of course, every investor is looking for an adequate environment where they are sure that their investment is secure. The lawless acts and corruption used to bring down Orange and Agility are continuing to be a barrier to most Western investors laying their investments in this Middle East country.
photo/ Daniel Diaz
Is Iraq Really Ready For Business?
After visiting Beijing recently, the Foreign Minister of Iraq, Mohamed Ali Alhakim, declared that Iraq is ready and open for business. If this was said some couples years back when Iraq’s economy was stable, then foreign investors would have invaded the market. However, there has been great hesitation among investors who are closely following the bad treatment of Orange and Agility.
Although some countries like China had the zeal of investing in Iraq it seems they are delaying their moves into this nation. As a matter of fact, currently, China and Iraq are great allies where China is the largest trading partner for Iraq while Iraq is the second-largest oil supplier to China.
As you can see, Iraq thinks it is ready for foreign investors which are contrary to what the investors are seeing. One of the determinant factors that is holding back so many investors including China, is the saga surrounding this famous telecom firm in Iraq known as Korek.
Korek’s Major Shareholders
As long as many foreign and Western companies want to venture into this new market in Iraq especially after the conflicts. However, after the lawless acts taken by Korek towards Orange Telecom and Agility, many view it as a warning of how they shall be treated when they invest in the country.
In 2011, these two famous companies, Orange and Agility came together as a joint venture and acquired a 44% stake in the telecom firm, Korek. With 44% percent stakes, you could consider them being one of the greatest shareholders or stakeholders in Korek. But unfortunately, it wasn’t.
Among the shareholders of Korek was also Sirwazan Barzani, who happens to be one of the most influential businessmen in Iraq who is from the most powerful family in Iraq.
Orange and Agility Investments
After coming into partnership with Korek, French and Kuwait decided to put all their effects in expanding their telecommunication services in this Middle East country. The two joint venture decided to invest 1 billion US dollars to Korek only to find that there were mismanagement and misappropriation of their money. Besides, Korek broke the partnership with them. And what does that mean? Orange and Agility collapsing and being pushed out of the country.
More Blackmail on Orange and Agility by Barzani
Barzani, one of the shareholders, colluded with IBL Bank from Lebanon and took a loan of $150 million which was generating a 13.25% interest rate. Sadly, the loan was taken without neither the knowledge and consent of Orange and Agility yet they are shareholders.
The fund was funneled to Barzani and the Korek company. Barzani later did another crazy thing and misrepresented the loan and said that it was an unsecured loan while in real sense it was a secured loan. From this lie, the interest rate became 4% just like for all the unsecured loans. Barzani profited handsomely from the reduction in the interest rate.
And finally, just in May 2019, Iraq regulator took another move of stripping off Orange and Agility their right of being stakeholders of Korek making Barzani hold a 75% stake. The joint ventures filed the case to at least recoup their investments but the political power that Barzani holds makes one wonder whether the joint ventures will win the case. For now, the quest for justice continues.
Author: Avani Mehta
