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