Kuwaiti MP questions government over Zain

September 13, 2009

, KUWAIT CITY, Sep 13 – A senior Kuwaiti MP has questioned the government over what he calls a "lack of transparency" and conflicting reports on the sale of a stake in Zain telecom.

Veteran opposition lawmaker and former three-time speaker Ahmad al-Saadun told Finance Minister Mustafa al-Shamali in a written query made available to reporters on Sunday that such contradictions could negatively impact the Kuwaiti bourse and national economy.

"The contradiction in information … and lack of transparency in the deal … may have negative implications on the Kuwaiti bourse and national economy," Saadun said in the question.

Prominent investors in Kuwait\’s Zain telecom, led by Al-Khorafi Group, last Tuesday said they had signed an agreement with a Malaysian-Indian consortium for the sale of a 46-percent stake in the emirate\’s largest mobile operator for 14 billion dollars.

They said the consortium is made up of Malaysia\’s alBukhary Group and India\’s Bharat Sanchar Nigam Ltd. (BSNL), India\’s largest communications service provider, Mahanagar Telephone Nigam Ltd. (MTNL) and Vavasi Group.

But Saadun said that after the signing ceremony, the two companies mentioned in the consortium denied they were part of the deal.

State-run BSNL and MTNL said in a joint statement last week that they have not yet decided whether to join the consortium.

The sale deal was signed in Kuwait by Bader al-Khorafi, a top executive of Kuwait\’s Al-Khorafi Group, the largest private shareholder in Zain, and Farid Arifuddin, Vavasi managing director.

Indian ambassador to Kuwait Ajai Malhotra, who attended the ceremony, said in a statement to Kuwaiti media on Saturday that the two Indian companies were undertaking due diligence before they make a final decision.

Saadun warned that the government has a constitutional responsibility to protect public funds, through its 24.6-percent stake in Zain, and also small investors who could suffer as a result of the sale and contradictory information.

Kuwait\’s Bayan Investments in its weekly report cast doubts over the nature of the deal, saying "it looks like the deal was not a final sale but a provisional agreement."

Zain shares have come under pressure since the deal was signed. The stock has lost about 19 percent and closed trading on Sunday at 1.26 dinars (4.4 dollars).

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