E& Group expressed its disappointment with the Casablanca Court of Appeal’s decision on July 3, 2024, rejecting the appeal filed by its subsidiary, Maroc Telecom. This decision upheld the ruling issued by the Rabat Commercial Court on January 29, 2024, which required Maroc Telecom to pay a fine of 6.368 billion Moroccan dirhams (equivalent to 645 million dollars) to Wana. The fine was imposed due to alleged anti-competitive practices by Maroc Telecom, based on Wana’s lawsuit.
E& Group, holding a 53% stake in Maroc Telecom and emphasizing its commitment to all laws and regulations in its operating markets, maintains confidence in the validity of Maroc Telecom’s legal position. The company intends to pursue all available legal avenues to appeal the ruling and safeguard its investment in Maroc Telecom. However, the ruling is not expected to affect the E& Group’s consolidated financial results for the second quarter of 2024 or subsequently, due to adequate coverage of regulatory risks, which the company takes into account in its accounting policy.
Commenting on the matter, Jassim Mohammed Bouataba Al Zaabi, Chairman of E& Group, stated, “We regret that at a time when global capital is focused on leveraging the transformative potential of the telecom and technology sector to enhance digital infrastructure, smart government services, and digital solutions for individuals, the challenges posed by the regulatory environment are having a negative impact on our future investments in Morocco.”
Hatem Dowidar, CEO of E& Group, added, “E& Group is dedicated to fully complying with the laws of the markets in which it operates. We recognize that digitally empowering societies is a key driver of our business success over the past decades. Achieving a digital future requires constructive collaboration between service providers, regulatory bodies, and legislative entities. This collaboration is crucial for achieving the desired development outcomes for societies and individuals.”
Dowidar concluded by emphasizing that all options regarding E& Group’s investment in Maroc Telecom are under consideration, given the repeated frustrations caused by regulatory violations, judicial rulings, and decisions hindering Maroc Telecom’s ability to compete effectively in the market. These factors have resulted in over 12 billion Moroccan dirhams (more than $1.2 billion) in costs for Maroc Telecom over the past few years. This constitutes one of the most significant instances of regulatory violations in the global telecommunications industry, hindering Maroc Telecom’s future investments.
E& Group Disappointed by Moroccan Court Ruling Against Maroc Telecom
The E& Group has expressed its disappointment with a ruling by the Casablanca Court of Appeal that upholds a previous decision obliging its subsidiary, Maroc Telecom, to pay a significant fine. The court’s decision, issued on July 3, 2024, confirms a judgment by the Rabat Commercial Court in January 2024, which imposed a 6.368 billion Moroccan dirham (approximately 645 million US dollars) fine on Maroc Telecom.
Allegations of Anti-Competitive Practices
The fine stems from a lawsuit filed once morest Maroc Telecom by Wana, which alleges anti-competitive practices. The E& Group, which holds a 53% stake in Maroc Telecom, asserts the validity of its subsidiary’s legal position and plans to pursue all legal avenues to appeal the ruling.
Impact on E& Group’s Financial Results
While acknowledging the significant financial implications of the ruling, the E& Group emphasizes that it will not affect its consolidated financial results for the second quarter of 2024 or beyond. The group attributes this to its proactive approach to managing regulatory risks, which are factored into its accounting policies.
E& Group’s Commitment to Morocco
Jassim Mohammed Bouataba Al Zaabi, Chairman of the E& Group, expressed his regret regarding the ruling, highlighting the importance of a supportive regulatory environment for the telecom and technology sector’s growth, especially in the context of digital infrastructure development and smart government services.
Regulatory Challenges and Future Investment
Hatem Dowidar, CEO of E& Group, reaffirmed the group’s commitment to compliance with market regulations. However, he pointed out that the challenges presented by the regulatory landscape have negative implications for future investments in Morocco. He emphasized the importance of constructive cooperation between service providers and regulatory bodies to achieve digital empowerment for societies.
Potential Impact on Maroc Telecom Investment
Douidar outlined the potential impact of the ruling on E& Group’s investment in Maroc Telecom, expressing frustration with repeated regulatory violations, judicial rulings, and decisions limiting Maroc Telecom’s ability to compete. He cited the substantial financial burden imposed on Maroc Telecom over the past few years, exceeding 12 billion Moroccan dirhams (over $1.2 billion), one of the highest amounts witnessed in the global telecommunications sector. This situation, according to Douidar, hinders Maroc Telecom’s future investments.
Key Takeaways from E& Group’s Statement
* **E& Group disagrees with the ruling and will pursue legal options.**
* **The ruling will not impact E& Group’s financial results.**
* **The E& Group remains committed to Moroccan investments.**
* **Regulatory challenges are a concern for future investments.**
* **E& Group highlights the importance of cooperation with regulatory bodies.**
* **The financial burden on Maroc Telecom due to regulatory violations is significant.**
Keywords
* E& Group
* Maroc Telecom
* Casablanca Court of Appeal
* Rabat Commercial Court
* Anti-competitive practices
* Regulatory environment
* Digital infrastructure
* Smart government services
* Digital empowerment
* Future investments
* Maroc Telecom investment
* Regulatory violations
* Financial burden
Table: Key Players in the Dispute
| **Entity** | **Role** |
|—|—|
| E& Group | Parent company of Maroc Telecom |
| Maroc Telecom | Telecommunications subsidiary of E& Group |
| Wana | Competitor of Maroc Telecom |
| Casablanca Court of Appeal | Court that upheld the ruling |
| Rabat Commercial Court | Court that issued the initial ruling |