Sarie Eldin Says ‘Surprised’ By OCI Officials’ Travel Ban As Talks Still Ongoing

Dr. Hani Sarie Eldin – the legal counsel for Orascom Construction Industries (OCIC.CA), said he was “surprised” by the travel ban decision taken against the CEO Nassef Sawiris and his father, the founder and former Chairman Onsi.

Sarie Eldin further added that the negotiations between OCI and the Egyptian Tax Authority was still ongoing over the EGP 4.7 billion related to the sale of Orascom Building Materials Holding to Lafarge SA (LG) in 2007. “There were no indications which say the talks between the tax authority and the OCI have reached a complete deadlock.” He noted

Billionaire CEO Nassef Sawiris and his father and former Chairman Onsi were banned from travel and placed on an arrivals watch list, Moustafa Dweidar, a spokesman for Egypt’s Public Prosecutor’s office, said yesterday. The Sawiris’ are accused by Finance Minister El-Morsi El-Sayyed Hagazi of owing 14 billion Egyptian pounds ($2.1 billion) in back taxes.

Orascom Construction, Egypt’s biggest publicly traded company, said in the statement it “received no formal notification about a travel ban” on Nassef and Onsi Sawiris related to the sale of Orascom Building Materials. The company, which has construction and fertilizer units, represents about a quarter of the EGX 30 Stock Index.

Capital Gains

Orascom Construction sold its cement unit in December 2007 to Lafarage for 8.8 billion euros ($11.4 billion) after it was relisted on Egypt’s exchange in October of that year. The company said in the statement that under law number 91 of 2005, “all capital gains resulting from the sale of shares listed on the Egyptian stock exchange are tax exempt; consequently the sale of Orascom Building Materials Holding to Lafarge in 2007 is exempt of any capital gains tax.”

President Mohamed Morsi said in an Oct. 6 speech that the government is seeking to recover money it’s owed by companies. While not identifying any company, he said one of them avoided paying tax on a profit of about 80 billion pounds from the sale of an asset by listing it on the stock exchange two months previously.