ICEC

Djezzy Appeal On $1.3 Bln Fine Postponed To May 6

An Algerian court on Sunday postponed an appeal hearing into a $1.25 billion fine imposed on Djezzy, the local mobile phone unit of Russian telecoms firm Vimpelcom, until May 6.

Djezzy chief executive Tamer El Mahdy, who has been convicted in the case and faces jail if the conviction is upheld, failed to appear for the hearing at the Ruisseau court in Algiers, a judicial source told Reuters.

A lower court ruled last month that Djezzy and its CEO were guilty of violating foreign exchange regulations. Djezzy’s parent company denied the allegations against it and its chief executive, and lodged an appeal.

Djezzy has been the subject of a long-running dispute with the Algerian government, during which the firm has been hit by back-tax demands, threatened with nationalisation, and put under criminal investigation.

Vimpelcom acquired Djezzy last year when it bought the assets of previous owner, Egyptian firm Orascom Telecom .

Under pressure from the Algerian government, Vimpelcom agreed to talks on selling a controlling stake in Djezzy to the Algerian state.

However, the decision to impose the $1.25 billion fine soured those talks and prompted Vimpelcom to announce it was going to international arbitration against Algeria.

Orascom Telecom, now a Vimpelcom subsidiary, said earlier this month that El Mahdy, an Egyptian national, was on medical leave. Asked to comment on his no-show in court on Sunday, an Orascom representative said the firm had no immediate comment.

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