Zain sale called into question

Lawmakers and a Zain shareholder have raised concerns about Etisalat's bid for the firm

Tags: Etisalat International - UAEKuwaitMergers and acquisitionsUnited Arab EmiratesZain - Kuwait
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Zain sale called into question A leading shareholder in Zain has threatened to sue the firm for its handling of the proposed acquisition by Etisalat. (Getty Images)
By  ITP.net Staff Writer Published  November 10, 2010

Etisalat's proposed acquisition of a majority stake in Zain Group continues to court controversy, with Kuwaiti opposition lawmakers threatening to question finance minister Mustafa Al Shimali over the Kuwait Investment Authority's handling of the sale, according to a report from Bloomberg.

The Action Bloc will question Al Shimali, who heads the investment authority, "if it is proved that the KIA's representative on Zain's board agreed to open the company's books, with all its confidential information, to the rival Etisalat, without Etisalat presenting a serious and detailed offer," the report added.

Zain confirmed on Monday that it would open up its books for Etisalat to start due diligence for the deal.

The Action Bloc's questioning of the deal followed closely from an announcement by Al Fawares Holding, a major shareholder in Zain, that it intended to sue Zain's management for failing to gauge the seriousness of Etisalat's offer to buy a 46% stake in the company.

In a statement published as an advert in Al Watan newspaper, Al Fawares Holding said it would sue "Zain, its respected chairman and members of its board" because of their decision to open the company's books to Etisalat without discussing the offer in a board meeting to ensure its seriousness, Reuters reported.

Etisalat said on September 30 that it had offered KD1.7 ($6.1) a share for a 46% stake in Zain, worth some $12 billion.

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