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Wed 10 Nov 2010 10:06 AM

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Kuwaiti MPs may question finance minister over Zain stake sale

Four-member Popular Action Bloc 'has decided to put its political responsibilities into action'

Kuwaiti MPs may question finance minister over Zain stake sale
Kuwaiti opposition lawmakers said they may question finance minister Mustafa Al Shimali over the Kuwait Investment Authority’s handling of the sale of a stake in Zain, to Etisalat (AFP/Getty Images)

Kuwaiti opposition lawmakers said they may question finance minister Mustafa Al Shimali over the Kuwait Investment Authority’s handling of the sale of a stake in Mobile Telecommunications Co, known as Zain, to Etisalat.

The four-member Popular Action Bloc “has decided to put its political responsibilities into action” and will question Al Shimali if the investment authority, the country’s sovereign wealth fund, approves the transaction, the bloc said in a statement distributed to the press.

The Kuwait Investment Authority is the largest shareholder in Zain, with a 24.6 percent stake.

Zain’s board approved on November 7 a request by Al-Khair National for Stocks and Real Estate Co. to conduct due diligence for the possible sale of a majority stake to Etisalat, as Emirates Telecommuniations Corp. is generally known. Al-Khair is owned by Kuwait’s Kharafi Group, Zain’s second-largest shareholder, which is leading the stake sale.

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,” according to the statement.

Abu Dhabi-based Etisalat said on September 30 that it offered KD1.7 ($6.1) a share for a controlling stake in Zain. The shares to be acquired will represent 51 percent of Zain’s total issued share capital and voting rights, Etisalat said November 3 after signing a preliminary agreement with Al Khair.

On the basis of 4.3 billion Zain shares outstanding, the stake is worth, at current exchange rates, about $12bn.

The transaction is subject to several conditions, including the disposal of Zain’s shareholding in Zain Saudi Arabia, Al Khair has said.

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