Construction Company Wins Egyptian Tax Evasion Appeal
Orascom Construction Industries, an international engineering and construction firm, has won a ruling in its favor from the Egyptian Tax Authority’s Independent Appeals Committee, against an earlier USD1bn tax evasion ruling relating to its Egyptian subsidiary.
Orascom Construction Industries (OCI) SAE said that it had been served with an assessment by the country’s previous regime as part of its public crackdown against tax evasion in October 2012. It said that it had agreed to a settlement, as being in the best interests of the company’s stakeholders, even though its auditors, KPMG, agreed that it had been compliant with the regulations at all times. The case concerned the sale of OCI’s cement assets to Lafarge SA in 2007, and OCI said that there had never been any official investigation into the accusations against it.
OCI said, “Following the change in Government in mid-2013, the Egyptian Public Prosecutor thoroughly investigated the entire tax file over a six-month period and fully exonerated the subsidiary of any tax evasion in a final written opinion published on February 18, 2014. Subsequently, OCI S.A.E. [the subsidiary] relaunched its legal right to appeal the tax settlement and the case was referred to the Independent Appeals Committee. This committee was originally reviewing OCI S.A.E.’s tax returns, but the process was terminated by the previous administration.”
The company said: “All other previous preliminary rulings related to the tax dispute that were appealed and pending the Appeals Committee’s final ruling are expected to be nullified, including all judgments issued against Chief Executive Officer Nassef Sawiris.”
OCI N.V. CEO Nassef Sawiris said: “We are pleased that this dispute has now been resolved. This is not only a victory for the Company and all its stakeholders, but also for the rule of law and the general investment climate in Egypt. The outlook for Egypt is very promising, and we continue to be committed to channeling resources towards growth and new investments in the country.”
