Iraq blocks Barzani's Korek Telecom internet over $1.3 billion debt

Iraq blocks Barzanis Korek Telecom internet service — Sirwan Barzani, the nephew of Massoud Barzani and the managing director of Korek Telecom, a company worth over $2 billion, with millions of subscribers across Iraq, 2024. Photo: iKurd.net/Barzani’s X

BAGHDAD,—The Iraqi government has ordered the suspension of Korek Telecom’s internet services across the country due to the company’s failure to settle a significant debt owed to the federal treasury, according to Iraq’s Parliamentary Integrity Committee.

Korek Telecom is owned by Sirwan Barzani, a Kurdish businessman, military leader, and nephew of Massoud Barzani, tribal leader and the president of the Kurdistan Democratic Party (KDP). Sirwan Barzani is also the cousin of Nechirvan Barzani, the President of Iraqi Kurdistan Region, and Masrour Barzani, the Prime Minister of Kurdistan Regional Government KRG.

The decision was announced by Ziyad Janabi, head of the Integrity Committee, who revealed that Korek Telecom owes the government $1.3 billion.

The suspension affects internet services in 15 provinces and marks the latest development in the government’s efforts to hold the company accountable for financial misconduct.

“Korek Telecom’s internet services have been suspended because of its failure to pay $1.3 billion in debts to the Iraqi government,” Janabi said in a statement.

Dr. Youssef Kilabi, a member of the Parliamentary Integrity Committee, emphasized that the decision was carried out under the direct orders of Iraqi Prime Minister Mohammed Shia’ Al-Sudani. “By order of the Prime Minister, Korek’s internet services have been suspended across 15 provinces of Iraq due to its failure to pay $1.3 billion in debt to the federal government,” Kilabi stated.

Korek Telecom has been at the center of legal and financial controversies for years. The disputes surrounding the company date back to 2011, when a joint venture involving French telecom giant Orange and Kuwaiti logistics company Agility acquired a 44% stake in Korek for $810 million.

The deal was approved by Iraq’s Communications and Media Commission (CMC). However, financial disagreements and allegations of fraud and corruption led to the case being taken to the International Court of Arbitration in Paris.

In March 2023, the court found Korek Telecom liable and ordered the company to pay $1.65 billion in damages to Agility. The ruling was based on claims that Korek and its leadership, including Sirwan Barzani, engaged in fraudulent activities and breached their obligations to the joint venture partners.

Agility, through its subsidiary and affiliate companies, has consistently alleged that Korek’s management misused company resources and engaged in corrupt practices.

In November 2023, Iraq’s Communications and Media Commission imposed sanctions on Korek Telecom, barring the company from establishing connections with both domestic and international carriers. This left Korek subscribers unable to make or receive calls or messages from other mobile operators, further disrupting services for millions of users.

Observers have expressed concerns that the debt owed by Korek may ultimately fall on the Kurdistan Regional Government. Critics argue that if Sirwan Barzani refuses to pay, the KRG may have to cover the amount from its budget, potentially impacting public services and development projects in the region.

The Barzani family, which wields significant political and economic influence in the Kurdistan Region, has faced decades of corruption allegations. Critics often refer to the family as “Kurdish oligarchs” who have amassed substantial wealth through control of the region’s oil revenues.

Transparency groups and Kurdish lawmakers claim that billions of dollars in oil revenue remain unaccounted for, further fueling accusations of mismanagement and nepotism.

In a related development, Swedish telecom giant Ericsson agreed in March 2023 to pay a $207 million fine for violating a U.S. investigation deal. The fine stemmed from the company’s failure to disclose details about suspected bribes tied to the Islamic State group in Iraq and the Kurdistan Region.

The suspension of Korek Telecom’s services underscores Iraq’s broader efforts to combat corruption and enforce financial accountability, particularly in the Kurdistan Region, which has long been criticized for its lack of transparency.

While the Integrity Committee has praised the government’s actions, it remains unclear whether the sanctions and legal rulings will compel Korek Telecom to settle its debts. As the dispute continues, the fallout from the case highlights ongoing challenges in Iraq’s telecommunications sector and its efforts to strengthen governance.