Orascom employees protest 'politically motivated' tax evasion case

Deya Abaza, Wednesday 13 Mar 2013

Thousands of OCI employees from across Egypt gathered at Cairo headquarters on Wednesday to protest what they perceive as politically motivated attacks on OCI, which is facing a tax evasion case

OCI Protest
Thousands of OCI workers block Nile Corniche on Wednesday 13 March 2013 (Photo: Deya Abaza)

Thousands of workers employed by Orascom Construction Industries (OCI) gathered on the Nile Corniche opposite the company’s headquarters in Cairo’s Nile Towers on Wednesday to protest the investigation of OCI founder Onsi Sawiris and OCI chairman Nassef Sawiris, his son, on charges of tax evasion.

The workers, who hailed from as far away as Ismailia, are demanding that the government drop the investigation against the company, on charges they deem to be legally baseless and posing a direct threat to their livelihoods. 

OCI is being charged with evading $2 billion of taxes on the 2007 sale of its subsidiary Orascom Building Materials Holding (OBMH) to cement giant Lafarge, on Egypt’s stock exchange.

“They have to take their hands off OCI and our livelihoods, or we will bring the country to a halt,” said Sherif Makram, a worker at an Ain Sokhna plant of the National Steel Fabrication, owned by OCI, as loudspeakers on the podium behind him blared out, “Our livelihood is a red line.”

“Our aim today is to send a message to the finance minister, the prosecutor-general and the president by showing them how many households are at risk of being shut down if they keep targeting our company,” said Michael Nagui, one of the main organisers of the protest and a senior administrator in one of OCI’s Cairo projects, who has been with the company for 14 years.

The organisers, who claim to be funding the action out of their own pockets, started mobilising early last week, directly after prosecutors issued a travel ban on Onsi and Nassef Sawiris, according to Nagui, who created the “Sons of Orascom” Facebook page which called for the protest.

OCI banner

“This initiative is our own,” said Nagui, adding that chairman Nassef Sawiris himself sent an email to company employees thanking them for their support but discouraging any protests that might be disruptive. 

That said, the company is at least tacitly allowing the protest. “We received an email from OCI human resources warning us about the protest today,” said Frank Naboulsi, general manager of the Fairmont Nile City hotel, located in the Nile Towers complex. Naboulsi, who witnessed last week's protest, was confident that the day's gathering would remain peaceful.  

The protest, which is the second of its kind held since the travel ban was issued, was scheduled to coincide with negotiations between OCI and the tax authorities to settle the alleged tax evasion case on Wednesday. Workers threatened an escalation if the day’s talks between OCI and Egypt’s Tax Authority (ETA) did not result in a favorable outcome for the company.

“We are prepared to launch a general strike nationwide if necessary,” Nagui affirmed, adding, “this tax dispute is harming OCI’s reputation, its profits, and consequently our salaries. We want a quick resolution.”

The gathering had a pronounced anti-Muslim Brotherhood feeling, as striking workers chanted slogans against Mohamed Badie, the group’s supreme guide.

“This tax dispute is a clear attack on the Sawiris family from the Freedom and Justice Party,” insisted Mohamed Megawir, head of industrial security at the Egyptian Grand Museum, an OCI joint venture with Belgian construction Besix group on the Cairo-Alexandria highway.

“It is completely illogical to demand taxes now that did not exist at the time of the deal. Why now?  The government is harassing the Sawirises to force them to flee the country,” said Beshoy Ghali, a Cairo-based OCI employee.

At the time of the deal, Egyptian law exempted stock market transactions from taxes, though the Egyptian Tax Authority considers the sale of publicly listed OBMH to be a corporate acquisition, and as such subject to taxation.

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