Orascom Construction Industries’ (OCI) shares fell to a three-month low to reach EGP 230 per share during Thursday’s session, on the back of a fiscal dispute with the government, with the EGX 30, the Egyptian Exchange’s (EGX) benchmark index, following suit with a 2.1% drop by the end of the week.
The OCI drop affected other leading stocks, namely Orascom Telecom and Commercial International Bank (CIB), which both fell by 2.3%.
OCI held two meetings with the Egyptian Tax Authority (ETA) last week to discuss tax evasion allegations directed at the company’s management. The meetings did not reach a conclusion, said sources, with a third meeting scheduled for Sunday.
The ETA submitted a tax bill demanding the company pay EGP 4.7bn in relation to the sale of Orascom Building Materials Holding (OBMH) to Lafarge SA in 2007, as clarified by the company in a press release.
State-run news agency MENA said two weeks ago that a judicial source had revealed that Prosecutor General Tala’at Abdallah decided to put both Onsi Sawiris, chairman of OCI, and Nassef Sawiris, the CEO of the company, on the travel ban and access entry lists.
OCI replied by confirming that it has received no formal notification about a travel ban on either Nassef or Onsi Sawiris pending confirmation of allegations of tax evasion in Egypt, through a press release issued the next day.
The following week, workers from all Orascom Group companies expressed their anger over the case by blocking the Corniche road in front of the Nile City Towers owned by the Sawiris family.
The travel ban is not the first for Onsi Sawiris, the founder of the Orascom Group. He was prevented from leaving the country for six years when his first construction company was nationalised under President Gamal Abdel Nasser. When President Anwar Al-Sadat took power, Sawiris moved to Libya for five years, and then returned to found OCI, which became the largest publicly traded company in Egypt.
OCI has repeatedly confirmed that it was confident of its tax position and that it did not violate any laws pertaining to the Lafarge deal.