DUBAI, March 15 (Reuters) - A joint venture of Kuwaiti logistics firm Agility and France’s Orange has filed a claim against three directors of Iraqi mobile telecoms operator Korek, alleging mismanagement and the apparent misappropriation of millions of dollars.
In 2011, Agility and Orange, formerly France Telecom, acquired a 44 percent stake in Korek Telecom Co. through a vehicle that also counts prominent Iraqi Kurdish businessman Sirwan Barzani and other locals among its shareholders.
Agility and Orange’s stake is held via Iraq Telecom, a joint venture in which Agility, formally PWS, owns 54 percent. Agility and Orange have together invested around $1 billion in Korek.
The claim by Iraq Telecom, filed in the Dubai International Financial Centre Courts and seen by Reuters, says one of the defendants, Abdulhameed Abdullah Salih Aqrawi, was chief executive of Sada Tech, a company that says it did work for Korek and cooperates with IraqCell, a firm owned by Barzani that is in direct competition with Korek.
The suit says Barzani, also a military commander, caused Korek to do deals with IraqCell on undisclosed terms to access fibre-optic cables.
It also says another defendant, Raymond Samir Zina Rahmeh, also failed to disclose a substantial interest in one of Korek’s competitors. It says Rahmeh was in breach of his fiduciary duties because of deals involving Korek with companies in which he also has a substantial personal interest, and to which Korek has paid tens of millions of dollars.
The filing alleges that Rahmeh and Barzani also colluded with the Lebanese IBL Bank to obtain a $150 million loan for Korek at an interest rate of 13.25 percent per annum.
The two individuals falsely told the Korek directors appointed by Iraq Telecom that the loan was unsecured when it was, in fact, secured, meaning it should have attracted annual interest of around 4 percent, the claim alleges.
Iraq Telecom says Barzani profited from the difference in interest rates at Korek’s expense.
The claim also accuses Aqrawi, Rahmeh and another defendant, Nozad Hussein Jundi, of being aware of, and complicit in, the mismanagement of Korek by Barzani, its “statutory manager”, who is in day-to-day control.
It says there is a lack of transparency in Korek’s operations and an absence of management accountability, and that transactions with parties connected to the defendants have led to the apparent misappropriation of tens of millions of dollars.
“Despite the fact that the first three defendants are aware of serious irregularities, wrongdoing in relation to the management of Korek and the consequential damage to the value of the company, they have done nothing about these matters and are, in effect, facilitating that wrongdoing and continuing to cause loss to the company,” the claim said.
Korek’s parent company International Holdings, 56 percent owned by Barzani and other local shareholders, is also listed as a defendant.
A person familiar with the matter said Korek’s foreign shareholders were pursuing separate legal proceedings against Barzani.
Aqrawi, Rahmeh, Barzani and IBL Bank did not respond immediately to Reuters’ requests for comment.
Jundi could not immediately be reached. An automatic email response from him said he had left Korek, although he is still listed as a director on the firm’s website. (Reporting By Tom Arnold; Editing by Kevin Liffey)
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