UPDATE 1-Djezzy appeal over $1.3 bln fine postponed again

Sun May 6, 2012 12:47pm EDT

ALGIERS May 6 (Reuters) - An Algerian court on Sunday postponed until May 27 an appeal hearing into a $1.25 billion fine imposed on Djezzy, the local mobile phone unit of Russian telecoms firm Vimpelcom, a Reuters reporter in the courtroom said.

The appeal hearing had already been postponed once, a week earlier.

Djezzy chief executive Tamer El Mahdy, who has been convicted in the case and faces jail if the conviction is upheld, was not in court for Sunday's hearing.

A lower court ruled in March 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.

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