Egypt's billionaire Naguib Sawiris's Orascom Investment Holding (OIH) announced it has received an official letter from the General Authority of Investment GAFI regarding the details of the United Nation's exemption to continue operating Koryolink, its North Korean mobile network.
OIH was granted in September an exemption from the UN Security Council to operate its unit in North Korea despite banning foreign companies from establishing or running commercial joint ventures in the country.
The UN approval considered Koryolink as an infrastructure utility in telecommunication sector that provides essential service to North Korean citizens.
As per the UN's exemption, Koryolink doesn't need any additional approvals or exceptions to facilitate its business inside and outside North Korea, as the decision has unlimited time.
UN Security Council issued a resolution on September 2017 obliging member states of the UN to pass laws prohibiting joint ventures and existing partnerships with The North Korean Republic unless approval is obtained to continue such joint venture.
Following the resolution, OIH submitted a request through the Arab Republic of Egypt in order to be excluded from adhering to the said resolutions.
Orascom Investment Holding owns a 75% stake in the company, with the remaining 25% held by North Korea’s Ministry of Posts and Telecommunications.
OIH announced in 2015 that it lost control of Cheo Technology; which runs Koryolink with around 3 million subscribers, and decided to recognize it as an investment in associates instead of investment in subsidies.
The Egyptian company has not been able to repatriate its profits from the venture over the past few years, due to the international sanctions imposed by the international community and the absence of a free-floating currency exchange market.
Furthermore, North Korea's government launched afully owned competing local telecom operator ; OIH negotiated with the Korean side to find a solution including merging Koryolink with the second local telecom operator, but the deal failed.
Though, Orascom reached arrangements with the Korean government lately to guarantee the fair allocation of subscribers between Koryolink and its local competitor, with the transfer of the cash balances in local currency to Euro using the parallel market rate.
They are also setting rules to allow the transfer of profits "repatriate funds" in case of the availability of retained earnings and foreign currency balances needed for the profit distribution process.