KUWAIT, (Reuters) – Al Fawares Holding, a Zain shareholder unhappy with the telecom carrier’s sale process, threatened to sue potential buyers of the firm’s Saudi unit and to try to put Zain in receivership unless the deal with the UAE’s Etisalat is made more transparent.
Al Fawares, which owns a 4.5 percent stake in Zain, made the announcement in an advertisement in Arabic language daily al-Watan on Sunday.
Al Fawares has filed a lawsuit to halt the due diligence in the planned $12 billion sale of a 46-percent Zain stake to Etisalat. A hearing has been set for Wednesday.
The company says Zain’s board should not have opened its books to Etisalat without board members seeing the offer.
On Sunday, Al Fawares said it informed banks involved in the deal, including National Bank of Kuwait and UBS, that it will go to court against “whoever tries to buy or sell Zain Saudi.”
“Al Fawares confirms that continued violations … on the assets of the company and the rights of the board of directors … might push Al Fawares or other shareholders to go to court and ask for placing the company into receivership unless things are done right, transparency is practised and any attempts to sell Zain Saudi or any other asset of the company are halted,” the ad said.
A Zain spokesman said management does not comment on issues involving shareholders.
Etisalat officials were not immediately available for comment.
Zain is selling its position in Zain Saudi as a condition of the Etisalat deal. Both Etislat and Zain have units in Saudi Arabia and compete for market share there.
Kharafi Group, one of Zain’s major shareholders, has said it gathered enough approvals from shareholders to tender the stake to Etisalat’s.
Separately, UAE Economy Minister Sultan bin Saeed al-Mansouri said in remarks published on Sunday that the Abu Dhabi government supports the deal. Etisalat is 60-percent owned by the UAE government.
He told Kuwait’s al-Qabas daily Zain was a “distinguished company with great geographic presence which could help us make up for some of Etisalat’s gaps in certain geographic locations.”