Orascom Answers Allegations

March 5, 2013 08:05 AM
 

 

Orascom Construction Industries (OCI), the parent company of the Iowa Fertilizer Company has come under scrutiny from a number of sources within Iowa and recent tax trouble in Virginia has CEO Nassef Sawiris playing prevent defense in the face of fresh allegations of tax evasion in Egypt.

In a press release yesterday, OCI sources said the following:ocicrane

"Orascom Construction Industries (OCI), in response to articles published by several websites commenting on recent statements from several identified and unidentified sources within the Egyptian government, confirmed that it has received no formal notification about a travel ban on its current Chairman and Chief Executive Officer Nassef Sawiris and former Chairman Onsi Sawiris pending confirmation of allegations of tax evasion in Egypt."

The controversy revolves around a 2007 sale of Orascom Building Materials Holding to Lafarge SA. The Egyptian Tax Authority has submitted a tax claim to OCI to pay EGP $4.7 billion related to the sale. OCI maintains that a 2005 law deeming capital gains resulting from the sale of shares listed on the Egyptian Stock Exchange makes the sale tax exempt. The company filed an appeal last month which is said to be presently under review.

All this at a time when Iowa legislators are voicing sticker shock at the generous tax incentives the State of Iowa offered OCI to build in the state. Iowa Economic Development Authority Director Debi Durham responded to critics in a February 28 Quad City Times editorial, "The last time I checked, $1.4 billion into Iowa’s economy plus 165 permanent jobs, 3,500 construction-related jobs and countless spin-off jobs, plus hundreds of millions in annual savings for Iowa farmers, plus millions in additional tax revenue (above and beyond the incentives provided) into the state coffers a good deal for Iowa."

As if that weren't enough, construction at the Lee County, Iowa plant remains on hold while archaeological artifacts found during post-groudbreaking survey work are examined. OCI has agreed to finance any excavation work that the State Archaeologist might require, and the National Registry of Historic Places is said to be aware of the discoveries.

Domestic nitrogen sources are vital to lowering the cost of producing corn. OCI has the tools and company experience to execute the construction and immeasurable logistics of a project like this. The Iowa Fertilizer Company expects to produce in the neighborhood of 2 million tons of nitrogen fertilizers in Iowa per year -- a much needed resource for the future of the cornbelt. The complex was originally slated to go operational in summer 2015. Construction will resume once archaeologists give the go-ahead.


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