US$4.5 billion lawsuit again Zain over Iraqna acquisition dismissed

Zain Iraq says that a US$4.5 billion lawsuit against the company has been dismissed by the local courts.

In April, Zain was issued the lawsuit that stemmed from its 2007 acquisition of an Iraqi mobile network operator Iraqna.

In a statement, Zain confirmed that it had received the lawsuit last August from Korek Telecom, which alleges that Zain’s purchase of Iraqna blocked its own rival offer.

Zain acquired Iraqna for US$1.2 billion from Orascom Telecom, having been providing mobile telephony in Iraq since December 2003 (previously under the name of MTC-Atheer). In August 2007, the company acquired a 15-year nationwide licence for US$1.25 billion, and shortly thereafter acquired Iraqna.

On January 5, 2008 Zain Group merged Atheer with Iraqna under the brand name Zain.

As a consequence of the lawsuit, an Iraqi court had ruled that revenues from the Iraqna part of the merged company had to be placed into a holding account and not released pending the outcome of the lawsuit.

As the lawsuit has now been dismissed, Zain confirmed that it can apply to have those revenues released by the court.

Korek Telecom has two weeks to appeal.