KUWAIT CITY, Feb 3 – The chief executive officer of Kuwait\’s Zain telecom giant, Saad al-Barrak, has resigned, the company said in a statement posted on the Kuwait Stock Exchange website on Wednesday.
The statement said Barrak has submitted his resignation to the board of directors, which will meet to consider it. No reason was given for the surprising move.
Barrak, who is also deputy chairman of Kuwait\’s largest listed company, has been with Zain since 2002 and has been the main driving force behind the firm\’s massive expansions and acquisitions.
News of Barrak\’s resignation hit the firm\’s share price, which ended Wednesday\’s trading down 2.2 percent at 0.880 dinars (3.06 dollars). At one stage, it slumped by 4.4 percent.
Over the past few years, Zain expanded rapidly by paying billions of dollars for huge acquisitions and is currently operating in 23 countries in Africa and the Middle East.
The company customer base has risen from around one million subscribers to about 72 million now.
The acquisitions started in 2005 with the purchase of the African assets of the Dutch Celtel for 3.5 billion dollars.
Zain\’s latest acquisitions have included winning a third licence in Saudi Arabia for 6.1 billion dollars and the purchase of assets in Morocco.
But the company\’s new operations did not all perform well, especially after the global financial crisis. Zain\’s key operations in Saudi Arabia, Nigeria and Sudan have been making a loss or very small profits.
The global credit crunch has forced some of the company\’s main shareholders, notably the biggest private investor, Al-Khorafi Group, to offer to sell a majority stake in the firm.
Al-Khorafi signed a preliminary agreement with an Indo-Malaysian consortium last September with a pledge to sell a 46-percent stake worth close to 14 billion dollars. The deal was due to be completed within four months.
The deadline has passed without any progress, but the investors still stressed that the deal is not dead, although it will take more time.
The consortium included India\’s state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), in addition to the Indian private firm Vavasi Group and Malaysia\’s Al Bukhary Group.
BSNL and MTNL remained non-committal on the sale, on one occasion citing a highly exaggerated price.
As of Wednesday, Zain\’s capitalisation stands at around 13 billion dollars.
It is one of three mobile operators in Kuwait, along with National Telecommunications Co (Wataniya) and Kuwait Telecommunications Co (VIVA).
Qatar Telecom owns a majority stake in Wataniya while VIVA is run by the Saudi Telecom Co.