Cairo: An Egyptian court has confirmed a three-year sentence against Nassef Sawiris, the billionaire former chief executive of Amsterdam-listed OCI, for failing to make a payment under a tax settlement with the state, a judicial source said.
OCI, parent company of Orascom Construction Industries, said in January it had suspended payment of a December 2013 instalment of a £7.1 billion (Dh42.2 billion) tax settlement with Egypt’s tax authority pending the outcome of an appeal.
The original settlement was agreed in April 2013, when Islamist President Mohammad Mursi was still in office, and related to claims the company had failed to pay £14 billion in taxes on the 2007 sale of Orascom Building, an OCI subsidiary, to French firm Lafarge.
OCI, a global producer of natural gas-based chemicals and an engineering and constructing contractor, has already paid £2.5 billion under the settlement and been due to pay an instalment of £900 million in December.
Before the settlement, the tax dispute with OCI had led to a souring of relations with the Mursi government. A travel ban was placed on Sawiris, a prominent member of Egypt’s wealthiest business family, and his ageing father.
The Egyptian army removed Mursi from power in July 2013 after protests against his rule and Sawiris decided to launch an appeal with a view to getting the settlement deal scrapped.
OCI said in July that a prosecutor general’s decision issued in February had cleared the firm and its management of any wrongdoing in the original tax dispute.
An appeals committee at the Egyptian tax authority is also due to rule on the original dispute on Tuesday. If it rules in favour of Sawiris the settlement deal could be scrapped.
In the meantime, a pre-existing law suit filed by the tax authority against Sawiris for non-payment of the instalments agreed in the settlement is going on.
The three-year sentence, which judicial and industry sources said was issued this week, related specifically to the non-payment of an instalment. It is also subject to appeal.
Though the case has proven inconclusive and Sawiris remains free, news about it has tended to have a negative impact on the Egyptian stock exchange in the past though OCI itself is now listed in Amsterdam.
