Warka Bank for Investment & Development removed due to failed takeover and inability to raise capital
Iraq’s Ministry of Trade has delisted Warka Bank for Investment & Development from the Iraq Stock Exchange (ISX) and the Iraq Securities Commission (ISC).
In a letter issued to the company, the Ministry of Trade outlines the seizure of Warka’s 98 million shares.
“The ISC has stopped all operations at Warka’s brokerage subsidiary in the market from July 26 following the seizure of the bank’s equity in this business by the Ministry of Trade,” says Hal Miran, managing director of Iraq-based brokerage firm Rabee Securities.
The move is a first for the ISX. According to Miran, Warka Bank has been suffering from capital issues, unable to attain the required ID100bn as the minimum set out by the Central Bank of Iraq. Warka had been in talks with foreign banks for a possible takeover, including UK’s Standard Chartered Bank and Russia’s Alpha Bank, but both pulled out.
Warka Bank has failed to address these concerns and is currently locked in a court case with Asiacell for failing to return the mobile operator’s $27m in deposits.
Speculation over political motivations behind the ministry’s decision have risen, but are difficult to clarify.
The Ministry of Trade has also seized shares held by the bank in nine other companies, which includes Al-Iraqiyah for Bank Guarantees, Al-Mas for Real Estate Investments and its brokerage firm Warka Company for Mediating in Trading Securities. None of these nine companies are listed and it is unclear how Warka’s shares will be disposed.
Warka’s executives were not available to comment.
In a further blow to the ISX, 23 of the companies listed have been forced to suspend trading after failing to adhere to laws related to financial disclosure and a failure to submit annual reports for 2010 and first-quarter results for this year.
Suspended companies include Sumer Commercial Bank, Al-Hilal Industries and Iraqi Land Transport.
You might also like...
McDermott completes financial restructuring exercise
28 March 2024
Region heads for hotel boom
28 March 2024
Lowest bidders emerge for Kuwait housing project
28 March 2024
Redcon wins Red Sea Triple Bay infrastructure deal
28 March 2024
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.