Kuwait gov't fights to keep MTC at home

Acting communications minister opposes mobile operator's plans to move its headquarters out of Kuwait.

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By  Reuters Published  August 31, 2007

Kuwait's acting communications minister said in comments published on Friday he opposed plans by Mobile Telecommunications Co (MTC) to move its headquarters out of Kuwait because it believes local laws deter investors.

MTC, Kuwait's largest publicly traded company, said last week it could move to the Gulf financial centres of Dubai or Bahrain, or to Amsterdam, base of its subsidiary Celtel.

Kuwait's al-Rai paper later quoted MTC Deputy Chairman Saad al-Barrak as saying Kuwaiti law was not investor-friendly and that Kuwait only accounted for 15 percent of MTC's revenue, a figure that would fall to 7 percent in two years.

But Acting Communications Minister Abdulwahed al-Awadhi told the daily that MTC, the second-largest Arab telecom firm by market value, was Kuwaiti and should stay in Kuwait.

"We do not accept these comments from Dr Barrak, because the company is close to us, and we will not be satisfied except with its development," Awadhi said. "We hope the firm has lots of bases in all countries in line with the operation of the parent company in Kuwait."

In conciliatory comments, Awadhi said he had met Barrak to discuss any problems facing MTC, in which the Kuwaiti government as the biggest shareholder, with a 24.6 percent stake.

"MTC knows it is a Kuwaiti company in origin and spirit and we hold it in esteem, but we are close to it and ... open our doors to it in overcoming the difficulties and hurdles it is facing," Awadhi said.

Kuwait has been dragging its feet on reforms to create a more transparent stock exchange. The head of a committee appointed to draft a new bourse law said last month a version approved by the cabinet would create a toothless regulator and could undermine efforts to attract foreign investment.Kuwaiti law imposes a 55 percent tax on foreign investors.

MTC operates in Bahrain in partnership with Britain's Vodafone Group Plc as MTC Vodafone Bahrain. It has no presence in Dubai, but operates in six countries in the Middle East and 14 in sub-Saharan Africa.

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