Zain CEO resigns without explanation

Zain CEO and Deputy Chairman Saad Al Barrak has resigned, the Africa and Middle East regional mobile operator announced, offering no explanation for the resignation and raising fears about the company's growth strategy, especially in Africa.

Zain, which is based in Kuwait, is the largest mobile operator in the Middle East and the second largest in Africa after Mobile Telecommunication Network (MTN) of South Africa. Zain's strategy has been under scrutiny since the economic downturn last year that saw the company laying off thousands of workers in Africa.

The company is, however, still undergoing some difficult times as a major shareholder is pushing to sell a controlling stake in the operator to foreign investors. As a result, there have been different and conflicting agendas between management, which does not want the company sold, and the board of directors pushing for the sale. Last year, the company's board of directors approved the sale of the company's Africa operations to Vivendi, a French Telecom operator. After negotiations, Vivendi opted not to make the purchase, claiming the business was unprofitable. Since 2009 the board of directors and India's Vavasi Group, compromised of two regional Indian telecom companies, have discussed a possible sale.

Kuwait's Kharafi Group, which is leading a consortium to sell a 46 percent stake in the operator, said last month that it will postpone its decision due to the region's current economic and financial circumstances.

In a statement Zain's board of directors acknowledging Al Barrak's achievements and said a replacement will soon be announced.

"The board of directors wants to reassure all Zain shareholders that it will continue to perform its duties to maximize the company's value while abiding by the highest ethical and profession standards," said a portion of the statement.

In 2002 when Al Barrak took the helm, Zain had just over 600,000 customers in its domestic market in Kuwait. Today the company has over 70 million customers and is now operating in 22 countries in Africa and the Middle East including Zambia, Kenya, Uganda, Saudi Arabia and Palestine.

Al Barrak's aim was to make Zain one of the top 10 mobile operators by 2011. But African telecom analysts said his ambition has been blown to pieces by the owners who want to sell off the company's African assets at US$12 billion. In order to expand its geographic footprint, Zain was planning more acquisitions in Africa.