December 06, 2016 12:31
The founder and chairman of Egyptian telecom giant Orascom resigned on Sunday after the company's massive investment in North Korea went belly-up.
Naguib Sawiris resigned a day after Orascom decided to shut down a branch of its affiliate bank Orabank in Pyongyang under sanctions imposed by the UN Security Council and the U.S. Treasury Department.
"Sawiris has done brisk business in the U.S. and Europe and has much of his assets in the West," a source said. "So he has no choice but to look for an exit in the face of the sanctions."
Sawiris has a U.S. passport and is therefore directly affected by sanctions that penalize U.S. citizens from doing business with the North, according to investigative website Finance Uncovered.
Orabank in Pyongyang is linked to Foreign Trade Bank of North Korea, which has been blacklisted by the U.S. for serving as a funnel for the regime's nuclear weapons development.
Born to a family of Coptic Christians in Egypt, Sawiris spearheaded the telecom markets in Pakistan and Lebanon to become the richest man in the Middle East and North Africa. But even before the sanctions North Korea proved a mire for his company, as the regime first wooed him and then tried to stop it from repatriating its profits.
Another casualty has been Yang Bin, the one-time chairman of China's Ouya Group, who was appointed to run a special economic zone in Sinuiju in the North in 2002.
Shortly afterwards he was arrested by Chinese authorities on charges of tax evasion and fraud and sentenced to 18 years in prison when they discovered that the North was building a casino there. His mistake was to trust the North while disregarding warnings from Chinese authorities.
Or take Xiyang Group, one of China's top 500 businesses, which spent 240 million yuan setting up an iron ore separation plant at a mine in Ongjin in North Korea. In 2012 the North simply threw the company out without giving it a chance to retrieve its investment.
And Ma Xiaohong, the chairman of Hongxiang Group in the Chinese border city of Dandong, made a fortune from business with the North. But in October he was arrested for his involvement in illegal financial transactions with the North.
A diplomatic source said Sawiris was once famous for his "Midas touch," but it seems not even he could break the curse of investing in one of the world's most isolated and capricious countries.
- Copyright © Chosunilbo & Chosun.com