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Etisalat voting rights not open to foreign investors

The United Arab Emirates' (UAE) former telecoms monopoly Etisalat will not be giving voting rights to foreign investors, despite offering shares to non-UAE investors.20 Aug 2015

Government-run Etisalat's shares can currently only be bought by UAE nationals, and only by individuals. However, it announced in June that shares would be offered to foreign and institutional investors.

In further details issued this week, Etisalat said that non-UAE investors will be allowed to own up to 20% of its shares, but will not be giving voting rights.

Etisalat will be converted to a public joint stock company, and will change its full name from Emirates Telecommunications Corporation to Emirates Telecommunications Group Company, or Etisalat Group, it said.

The federal government owns 60% of the company through the Emirates Investment Authority fund, and will be given a 'special share' that gives it a veto over decisions including changes to share capital, rights attached to shares, merger approval, allowing any shareholder to own more than 5% of share capital, and allowing the government's stake to fall below 51%, Etisalat said.

Although foreign shareholders will not be allowed to vote, they can attend Etisalat Group's general assembly, it said.

Etisalat Group will now establish a new operating company to operate its telecoms network business and provide telecoms services in the UAE, it said.