Zain shareholder threatens lawsuit

A major shareholder of Kuwait's Zain said on Tuesday it was suing the telecom carrier's management for failing to gauge the seriousness of etisalat's offer to buy 46 per cent of the company.

"Al Fawares Holding, as a major shareholder of Zain, confirms it will sue Zain, its respected chairman and members of its board because of their decision to open the company's books to the UAE's etisalat... (without discussing the offer in a board meeting) to ensure its seriousness ... and guarantees," the company said in a front-page advertisement in Al Watan daily.

It was not immediately clear how much of Zain the company owns, or when it was taking action.

Zain's board approved opening its books on Sunday for due diligence by etisalat, which has offered to buy 46 per cent of the company in a deal worth just under $12 billion.

Selling Zain's Saudi assets is one of the deal's conditions.

Al Fawares said any asset of Zain is an asset for all its shareholders, and selling shares would "harm all shareholders who will not take part in the deal."

Last month, Kharafi Group, one of Zain's major shareholders, said it gathered enough approvals from shareholders to tender to etisalat's bid for a 46 per cent stake.

The group asked National Investments Co (NIC), which it owns, to secure the rest of the shareholder support required for the deal.