[Screenshot captured from Orascom website]
Egyptian firm Orascom, the first mobile network provider in North Korea, will shut down its affiliate bank in the isolated country mainly due to US sanctions, according to an Egyptian newspaper report.
Orascom Telecom Media and Technology Holding (OTMT) owned by Naguib Sawiris said in a note to the Egyptian Exchange that it would shut down its affiliate bank, Orabank, in North Korea, the newspaper Daily News Egypt reported.
Orascom said the closure is a result of force majeure due to sanctions imposed by Washinton against Pyongyang, but the company promised to keep its mobile phone joint venture, Koryolink, running. Koryolink, the first 3G mobile operator in the North, has used Orabank for financial transactions, the daily said.
The closure of Orascom's subsidiary underscores the risk of doing business in and with North Korea, one of the world's most isolated nations.
Pyongyang is known for flouting international norms, and foreign firms doing business in the communist country have complained that property and profits have been appropriated by the regime.
Orascom has a 75 percent stake in Koryolink, with the North's communications ministry holding the rest. Since the launch of Koryolink in 2008, the number of subscribers has grown steadily to three million, although there is no internet access for domestic users.
North Korea fearing an inflow of undesirable and decadent foreign culture and news maintains tight regulations on internet use, and mobile internet access for foreigners with limited speed or traffic amount is available at a comparably high price.
Orascom has struggled with a series of problems. It was not able to repatriate profits due in part to international sanctions and foreign currency controls. There has been a huge gap between the government-set official exchange rate and the black market rate.
Orascom said in a November filing that it had lost control of Koryolink and struck the venture from its balance sheet, removing hundreds of millions of dollars in assets.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
