October 17, 2011 / 11:57 AM / 8 years ago

UPDATE 1-Kosovo halts state-owned telco sale

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By Fatos Bytyci

PRISTINA, Oct 17 (Reuters) - Kosovo halted the sale of state-owned post and telecom firm PTK on Monday, after corruption charges against senior management prompted Croatian telecom group T-HT to drop its bid.

“The government committee for the privatisation of Telecom decided today to cancel this process and to begin a new one,” Economy and Development Minister Besim Beqaj told a news conference, in the latest setback to efforts to attract foreign investors to the young Balkan country.

T-HT, majority-owned by Deutsche Telekom (DTEGn.DE), and Telekom Austria were shortlisted in June in the race to buy 75 percent of PTK, only days before prosecutors from the European Union police and justice mission (EULEX) in Kosovo charged its chief executive and four others with corruption.

Last week, T-HT said it was reviewing its participation in the privatisation process after “charges recently filed against certain PTK managers suspected of corruption”.

Beqaj said the sale could not continue with only one bidder.

PTK Chief Executive Shyqyri Haxha and its board Chairman, Rexhe Gjonbalaj, are accused of making “harmful contracts” and abusing official positions.

Haxha has dismissed the accusations against him as “fabricated” and a trial date has yet to be set.

The sale of PTK was expected to net between 300 and 600 million euros ($416-$832 million), funds already pencilled into the impoverished country’s 2011 budget.

Efforts to attract investment in Kosovo, which declared independence from Serbia in 2008, have been dogged by legal disputes, mismanagement and alleged corruption. ($1 = 0.721 Euros) (Writing by Matt Robinson; Editing by Dan Lalor and David Holmes)

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