Following our report of the dispute over ownership of Egyptian mobile operator Mobinil, it has become all too clear that the arguments between France Telecom and Orascom Telecom will become fiercer, arbitration or not. A Reuters report from Cairo describes the allegations traded between the two main shareholders in Egyptian mobile operator Mobinil. It is evident that the dispute - over ownership of Mobinil -will be an increasingly bitter one, not least as one party, France Telecom, has accused the local regulator of "double standards" while the other, Orascom Telecom, has said that it is willing to "struggle for years" to retain its shareholding.
As clarification of these comments, France Telecom has questioned the neutrality of CMA, the Egyptian market regulator, and Orascom Telecom's Chairman has stated that he will not give up Mobinil's stake without exhausting all legal avenues.
The argument has its roots back in 2001 when the two companies signed an agreement as partners in the holding company that carries their two stakes in Mobinil. This April the International Court of Arbitration at the International Chamber of Commerce in Geneva ruled that France Telecom must buy Orascom Telecom's 28.75% stake in the holding company for US$48.80 per share.
This leaves the other 71.25% of the holding company shares - and how much France Telecom will have to pay for them. CMA has twice rejected France Telecom's offers for these shares.
Two quotations sum up the vehemence of the two opponents' opinions. Naguib Sawiris of Orascom Telecom told the al-Ahram newspaper, "I am the one who got the licence, I am the one who built the company. It is true that France Telecom was a part, but this company is my start and this is my country, and I will not give it up even if the struggle lasts for years to come...We have documents to prove we went to the stock exchange during the legal period mentioned in the ruling with all our documents to execute (the ruling) and FT did not send their broker."
Jean-Yves Larrouturou, Deputy Managing Director of France Telecom and with special responsibility for Africa, Middle-East and Asia, said Orascom Telecom had given his company two unattractive choices: raise its offer for minority shares or make a fresh start with a 50-50 partnership in the holding company. He continued, "It is as if he wanted to kick us out of the country, and this is unacceptable." As for CMA, "All its actions indicate that it is looking at things with double standards. It is not taking any measures against the other partner as it is doing with us."
Developing Telecoms acknowledges the input from Reuters.