Nassef Sawiris (Photo: AP)
The independent appeals committee of Egypt's tax authority has ruled in favour of Orascom Constructions Industries in a tax dispute case, the company announced on Tuesday.
"All other previous preliminary rulings related to the tax dispute that were appealed and pending the Appeals Committee’s final ruling are expected to be reversed, including all judgments issued against Chief Executive Officer Nassef Sawiris," said the company's statement.
In July, Sawiris was sentenced in absentia to three years in prison and fines worth LE50 million on charges related to the case.
"I am grateful that ultimately justice has prevailed. This marks the end of a challenging period for OCI and I look forward to a renewed management focus on building for the future. I believe Egypt's future economic prospects have been rejuvenated under the new leadership with a general sense of urgency to restore the country’s investment pipeline and investor trust," Sawiris told Ahram Online in an email.
Sawiris, Egypt's richest man, also announced a commitment to maintain the company's presence in Egypt through construction services and large-scale investments in infrastructure.
"Our first investment is going to be presented to the government this week for a multi-billion dollar project related to the power sector in partnership with a prominent Middle Eastern group," he told Reuters following news of the ruling on Tuesday.
OCI was charged during ousted president Mohamed Morsi's year in office with evading LE14.4 billion ($2 billion) in taxes on the sale of its subsidiary Orascom Building Materials Holding (OBMH) to French cement giant Lafarge in a deal worth $15 billion.
The sale was executed in 2007 on the Egyptian Stock Exchange, which at the time did not tax gains made from bourse transactions.
The dispute was settled with the Egyptian Tax Authority (ETA), with CEO Nassef Sawiris agreeing to pay LE7.1 billion to the authorities in installments until 2017.
Egypt's prosecutor-general placed a travel ban on Nassef and his father Onsi, founder of OCI, while they were both overseas, pushing them into self-imposed exile.
Following Morsi's ouster in July 2013, the Egyptian Public Prosecutor reviewed the file and issued a statement exonerating OCI of any wrongdoing in February 2014, prompting OCI to appeal the tax settlement.
While the case was referred to the Independent Appeals Committee of the ETA, a Cairo court sentenced Sawiris to three years in jail and fines totaling LE50 million for failing to pay due checks to the authority as part of the settlement, following legal action previously filed by the authority.
According to the company, Tuesday's ruling by the ETA means that all rulings related to the tax dispute under appeal pending the committee's final decision will be overturned.
OCI is the Egypt-based subsidiary of Dutch Company OCI N.V., a global producer of natural gas-based fertilisers and industrial chemicals and an engineering and construction contractor based in the Netherlands.