The CEO of Kuwait’s Mobile Telecommunications Co., also known as Zain, didn’t explain his decision to leave the company and could not be reached for comments, according to Dow Jones Newswires.
“Saad Al Barrak has handed in his resignation to the chairman of the board and the chairman will present the resignation to board members to look into the matter”, Zain confirmed in a statement to Kuwait’s bourse Web site.
Al Barrak has been the organization’s CEO and deputy chairman since 2001, being responsible for turning Zain into the third-largest Arab telecom operator by market value.
His resignation comes in a difficult time for the company, since a major shareholder is pushing to sell a controlling stake in the operator to foreign investors. Kuwait’s Kharafi Group, which is leading a consortium to sell a 46% stake in the operator, said in January it will postpone its decision due to the region’s current economic and financial circumstances.
In September last year, a group of Indian and Malaysian investors manifested interest in buying the Zain stake for about $13.7 billion, a deal that would take 4 months to finalize, as confirmed by the vice-chairman of Kharafi Group. Unfortunately, the Indian companies didn’t confirm their participation in the deal, casting doubt about its viability.
As a result, Zain had to put on hold its negotiations to sell the African assets, excluding Sudan and Morocco. According to a telco analyst, the resignation might have come as a result of the different agendas between the shareholders and the management.
The telco’s shares closed down 2.2% Wednesday on the Kuwaiti bourse at 0.88 Kuwaiti dinars ($3.05), following Al Barrak’s resignation.
Naser Al Nafisi, general manager of Kuwait’s Al Joman Center For Economic Consultancy, describes the former CEO as a man who “turned Zain into a global player” and “has clearly left his mark on the company”.
Zain currently operates in 23 countries in Africa and the Middle East region, serving over 70 million customers. The company started as a telco in Kuwait in 1983 and has aggressively expanded by acquisitions ever since.
The company spent $3.4 billion under Al Barrack to acquire Netherlands-based Celtel in 2005 to enter sub-Saharan Africa, in order to become a top global operator, and $6.1 billion to acquire an operating license in Saudi Arabia.
According to the Saudi company’s chairman, Al Barrack will continue in his position as CEO of Zain Saudi Arabia, in which Zain holds a 25% stake.
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