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 Korek Telecom faces total suspension over unsettled debt

2023-11-26 19:16:34

Medya News

Erbil-based telecommunications giant Korek Telecom is facing a severe crisis, as the Iraqi parliamentary committee increases pressure on the company, urging the Communications and Media Commission (CMC) to cut off its connections permanently unless it resolves financial disputes. The company's CEO is Sirwan Barzani, nephew of Massoud Barzani, leader of Iraqi Kurdistan's ruling Kurdistan Democratic Party (KDP).

The Iraqi parliamentary committee has stepped up pressure on Erbil-based telecoms giant Korek Telecom, urging the Communications and Media Commission (CMC) to cut off the company’s connections permanently if it doesn’t resolve its financial disputes with the government, Roj News reported on Saturday.

With seven million Korek users already cut off from all networks, the threat of further damage looms large if the debt issue persists.

Iraq already blocked Korek Telecom from sending and receiving communications through domestic and international carriers in early November over unpaid financial obligations, after the CMC declared victory in a court ruling against Korek Telecom, ordering the company to pay a hefty $800 million to the Iraqi treasury.

The CMC cited a number of financial, legal and technical issues, as well as Korek Telecom’s failure to comply with court rulings by the Supreme Judicial Council, as reasons for its blocking decision. As a result, Korek subscribers were unable to make or receive calls and messages from other domestic and international mobile operators.

The CMC ordered Korek to pay $800 million in taxes within 15 days, a decision the company reportedly agreed to, according to Kurdistan24.

Sirwan Barzani is the CEO of Korek Telecom, a company worth more than $2 billion with nearly 3,500 telecommunications towers across Iraq. He is also the nephew of Massoud Barzani, leader of Iraqi Kurdistan’s ruling Kurdistan Democratic Party (KDP), and a cousin of the President of Kurdistan, Nechirvan Barzani.

In addition to Korek Telecom’s troubles, Sirwan Barzani faces further legal complications stemming from a loan made in 2007 by Alcazar Capital Partners, which is owned by the Kuwaiti logistics company Agility. The loan, which was intended to pay for Korek Telecom’s national mobile phone licence, was not repaid, leading to a court ruling that the Kurdistan Regional Government (KRG) must pay $490 million in compensation.

In a separate development, the International Court of Arbitration in Paris found Korek liable and awarded $1.65 billion in damages to Kuwaiti logistics company Agility. The case, which dates back to 2011, involved a joint venture between the French telecoms giant Orange and Kuwait’s Agility, which acquired a 44 percent stake in Korek for $810 million with the approval of the CMC.

The situation is further complicated by revelations from the International Consortium of Investigative Journalists (ICIJ) Ericsson List report in 2022, according to which Ericsson managers approved a $50,000 cash request in 2014 from Sirwan Barzani, who at the time was both chairman of Korek and de facto head of the Kurdish peshmerga forces. The funds were earmarked for a charity controlled by Barzani, raising suspicions of irregularities and forged signatures.

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