Egyptian Billionaire Naguib Sawiris Tells Canada He is Not Spy

by Istvan Fekete on October 16, 2013

The backer of Wind Mobile, Egyptian telecom tycoon Naguib Sawiris, says he is done with Canada, and that he won’t invest a penny in the country that recently blocked his deal with MTS to acquire Allstream for CN$520 million.

“I am finished with Canada, I tell you,” the telecoms tycoon told Ahram Online after the fibre optic company he thought he was set to acquire for C$520 million ($US504 million) said it was ‘extremely surprised and disappointed’ Canada blocked the bid.

From the perspective of Africa’s ninth-richest person, Ottawa’s decision to block the Accelero Capital–MTS Allstream deal was a farce. He did express his surprise on the day the government published its decision on the deal. Both Sawiris and MTS’s CEO were surprised at seeing their deal rejected, despite the encouraging feedback received during the audit.

“The world is big and my money can go anywhere,” said Sawiris, the eldest son of the Coptic Christian family that controls the sprawling Orascom corporate empire. “I regret that we wanted to invest in Canada,” said the tycoon in an interview in Cairo, weary and defiant in the wake of the takeover deal that Canada quashed.

Ottawa’s objection was: the transaction didn’t meet the “net benefit” of the Investment Canada Act, which allowed them to veto the deal based on national security concerns. The only issue Sawiris could think of is that Orascom Telecom has a 75% stake in Koryolink, North Korea’s sole 3G cellular operator. Does Canada think Egypt sends agents to spy on Canada?

“Maybe they thought there was a link between North Korea and Egypt, and that Egypt was sending agents to spy on Canada” on behalf of North Korea, “like a James Bond movie,” said Sawiris, whom North Korea’s official news agency in 2011 reported met with the late North Korean leader Kim Jong Il to discuss business opportunities. “That’s their level of sophistication,” said Sawiris, referring to Canada’s government, which he said he puts on a par with China for its restrictions on foreign direct investment in its telecoms sector. “We were buying a fibre optic telecommunications network that was already built by AT&T,” Sawiris told Ahram Online. “There were no Chinese at work. And if it was the case that it wasn’t allowed to buy from the Chinese, [the government] should have informed us.”

Sawiris also questioned the government’s double standards applied to Canadian companies as opposed to foreign companies: “If a Canadian company [owns] a network, is there enough security to make sure this network is not being eyed by a spy?” The thinking that a Canadian won’t betray his country but a foreigner “definitely will be coming with bad intentions… is [rejected] in the whole world except Canada and China,” he said. But with China, “you can understand, because it’s not a real democratic regime, not open, not liberal. With Canada, it’s a joke.”

Canada has rejected high-profile deals involving foreign parties in the past based on national security concerns: in 2008 Ottawa blocked a proposed acquisition by Alliant Techsystems Inc. of Canadian aerospace company MacDonald Dettwiller & Associates Ltd. And now, the Allstream–Accelero deal.

Sawiris said he won’t sue the government over its decision, but as he points out, the incumbents have won again through lobbying to push competition out of the market.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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