Iraqi mobile operator Asiacell is still locked in a legal battle with Warka Bank for Investment & Finance. The Kuwait-owned operator is suing the bank for the return of funds under bankruptcy provisions of the Iraqi Commercial Code.
In February, Asiacell attempted to take out more than ID29bn ($25m) in deposits, but was refused the amount by Warka Bank.
“We have an issue with Warka Bank, it is under the implementation of the court and we are awaiting a decision and resolution,” says Diar Ahmed, chief executive officer of Asiacell, without commenting further on the case.
Warka Bank has been struggling recently. Revenues have dropped harshly over the past couple of years. The bank has faced problems particularly after the Iraqi government decided to withdraw its deposits from the country’s private banks. It withdrew $1.6m from Warka in November 2010.
“Warka Bank is in bad shape. It has little liquidity and so has been unable to pay Asiacell back. The court case is likely to take a long time,” says Shwan Taha, chief executive officer of Baghdad-based brokerage Rabee Securities.
The bank has suspended trading since January this year to increase capital from ID75bn to the required ID100bn under Central Bank provisions.