Orascom construction industries (Page: Official website)
Egypt’s largest listed construction company, Orascom Construction Industries (OCI), remained stagnant during early trading Sunday despite the market benchmark EGX30 rising 0.5 percent.
OCI is continuing a war of words against the Egyptian Tax Authority (ETA) on alleged LE14 billion (roughly $2 billion) tax evasion. The latter stated Thursday that it had in its possession documents proving that OCI should pay taxes on its earlier sale to Lafarge.
For its part, OCI stated Friday that ETA’s claims that the sale of OBMH (OCI’s subsidiary) to Lafarge SA occurred prior to the listing date of OBMH in the Egyptian stock exchange are false, saying that the sale occurred two months after the company was listed.
At the time of the deal, Egyptian law exempted stock market transactions from taxation.
OCI added that the company and its affiliates presented their annual tax returns on the legally set dates and has provided supporting evidence to the ETA for the period 2007-2010.
“In light of that fact, the company fails to understand how the ETA never brought to its attention an alleged tax claim on the transaction. Furthermore, the company fails to understand how the ETA can simply blame the delay in submitting the tax claim on 'errors in examination' by former tax officials,” OCI stated.
On Thursday, Egypt’s prosecutor-general, Talaat Ibrahim, ordered the formation of a technical committee tasked with looking into the tax dispute between OCI and ETA that resulted in a travel ban on OCI chairman and CEO Nassef Sawiris, and his father, former company chairman Onsi Sawiris.