LATEST ON CORA DE COMSTAR U.S. BUSINESS DISPUTE

UNCLAS ABIDJAN 000758 SIPDIS SENSITIVE SIPDIS STATE PLEASE PASS TO USTR E.O. 12958: N/A TAGS: ETRD IV EINV SUBJECT: LATEST ON CORA DE COMSTAR U.S. BUSINESS DISPUTE ¶1. (SBU) The Ivoirian Telecommunications Agency (ATCI) announced last week that it had revoked Cora de Comstar's cell phone license because of non-use of the license by Cora. The unexpected decision follows the signing of a draft, non-binding agreement in February 2006 between Western Wireless and the ATCI Managing Director, Sylvanus Kla, in which Cora shareholders agreed to relinquish their interest in the company in exchange for a payment of $6 million. The government would issue Cora's cell phone license to a new operator who would be responsible for making the $6 million payment to Cora shareholders. If the new operator did not do so, the government committed to pay the $6 million by December 31, 2006. ¶2. (SBU) Cora has told us they were taken by surprise by the announcement that its license had been resold. However, they added that Kla has told them that the February draft agreement remains in effect and that ATCI has the $6 million available and can effect the transfer of funds to Cora. Cora shareholders would like to send a representative (a senior manager of the Modern Africa Two fund) on or about July 19 to collect the payment and, if possible, to obtain the government's signature on a final settlement agreement. (Cora shareholders are concerned that without a settlement they may face further litigation from erstwhile partner Alexander Galley.) ¶3. (SBU) We told Cora shareholder representatives that we doubted that Kla had the authority to make the payment or sign a settlement agreement and that such a transaction would likely require the approval of the Prime Minister. We added that with various looming deadlines related to the peace process, it seemed unlikely that the PM would be ready to approve the transfer or sign the settlement agreement by next week. ¶4. (SBU) Guy Mbengue, director of the Ivoirian Export Promotion Agency, APEX-CI, who has been actively involved in trying to resolve this dispute, has told us that the Prime Minister's office has been blocking final settlement of the case. For the past several weeks, post has been unsuccessfully attempting to schedule an appointment with the Prime Minister's chief of staff to discuss the case. On July 14, we spoke again with Mbengue, who told us that he had talked with the Director General of Economy and the acting Minister's chief of staff at the Ministry of Finance. The two told him that the government had not approved ATCI's revocation of Cora's license or the payment of the $6 million to Cora shareholders. The officials said they had convoked Kla for a meeting on the morning of July 14 to review the case and Kla's actions. The Finance officials said the government is still considering the case based on the February draft agreement. They confirmed that the government would have to approve the $6 million to Cora and they agreed that there should be a final, signed settlement agreement between the government and Cora shareholders. Mbengue promised to brief us on the outcome of Kla's meeting at the Ministry of Finance. Despite the mixed signals coming from the GOCI, Mbengue felt that the latest developments could help precipitate a decision by Prime Minister to settle the case. ¶5. (SBU) We are continuing to try to meet with the Prime Minister's chief of staff. The Ambassador also plans to raise the issue with President Gbagbo and Prime Minister Banny in the next few days. Hooks