The chief executive of Vimpelcom's Algerian mobile phone unit, who has been at the centre of an acrimonious dispute with the Algerian authorities, is on medical leave, his employers said late on Thursday.

Tamer El Mahdy has been chief executive of Orascom Telecom Algerie (OTA) -- which trades under the name Djezzy -- during a period when the firm has been hit with back tax demands, threatened with nationalisation and subject to an investigation over currency violations.

"Tamer remains the CEO of OTA with full support of OTH," said a representative of Vimpelcom-owned Orascom Telecom Holding, Djezzy's Cairo-based parent company.

"He is currently on medical leave (meaning he is taking some time away from work to take care of his health)." The representative did not say where Mahdy was taking his medical leave.

Vimpelcom has owned Djezzy since it took over assets of Egyptian firm Orascom Telecom last year. The unit's future has been clouded in uncertainty because talks with Algeria about nationalisation have dragged on for months.

Algerian media reported last month that a local court had convicted Mahdy, an Egyptian national, of violating currency rules and barred him from leaving the country. As part of the same case, a $1.25 billion fine was imposed on Djezzy.

Orascom Telecom has confirmed the fine and said that a member of the Algerian unit's "senior executive team" had been given a criminal sentence, though it did not name the executive. Orascom Telecom denied the allegations against Djezzy and its executive and said it would file an appeal.

Vimpelcom has agreed, in principle and subject to a deal on price, that it will sell the Algerian state a 51 per cent stake in Djezzy, while the Russian firm will retain management control.

That agreement though is on hold because Vimpelcom, 35 per cent-owned by Norwegian group Telenor, announced this month it was going to international arbitration over Algeria's treatment of Djezzy.