UPDATE 1: OCI to pay $1bn in tax settlement: Minister

Bassem Abo Alabass, Sunday 24 Mar 2013

Minister of Finance says OCI agrees to pay LE7.1 billion ($1 bn) to end its tax dispute with government; OCI says it will reveal details of settlement as soon as possible

Headquarters of Orascom
Headquarters of Orascom in Cairo (Photo: Reuters)

Egypt’s biggest private construction firm Orascom Construction Industries (OCI) has initially agreed to pay the country’s tax authority (ETA) around LE7.1 billion ($1 billion) over a tax evasion dispute worth roughly $2 billion, Finance Minister El-Morsi El-Sayed Hegazi said at a conference on Sunday, Al-Ahram Arabic news website reported.

A spokesperson for the Ministry of Finance, Mohamed El-Saqqa, confirmed the news to Ahram Online.

According to El-Saqqa, the ministry is currently setting the legal framework for the reconciliation with OCI.

In response to an enquiry by the Egyptian Bourse on Sunday, OCI said negotiations with the ETA were ongoing and the firm would reveal details of the settlement as soon as possible.

The tax dispute is attributed to the sale of an OCI subsidiary to La Farge in 2007 worth a total of $12 billion.

Reconciliation comes following a war of words between the disputing parties. Egyptian Investment Minister Osama Saleh said he was brokering a deal to solve the conflict.

Earlier this month, Egypt’s prosecutor-general, Talaat Abdullah, 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.

Egypt's stock exchange suspended trading in OCI shares on Sunday then reversed the move after OCI said it would reveal details of the tax settlement.

OCI's share price rose by some 1.4 percent in trading on Sunday.

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