Back to the complete issue
Monday, 1 August 2016

Ministers of planning, supply, industry, and agriculture questioned in wheat fraud probe

Planning Minister questioned by House investigative committee: Planning Minister Ashraf Al Araby appeared yesterday before the House committee investigating allegations of fraud in this season’s wheat harvest. The minister was summoned to answer questions about allegations that counterfeit smart cards in the bread program were costing the state bns, according to committee member Yasser Omar. Employees of companies developing the smart cards have allegedly been implicated in the counterfeits, Omar alleged in a call-in to Al Hayat TV (runtime: 4:48).

Eric Knecht first broke the allegations of corruption in the smart card program in an epic investigative piece for Reuters this past March. Supply Minister Khaled Hanafy has long maintained that the smart cards system had saved the state mns.

Hanafi was also questioned by the committee on Sunday. Hanafy denied his ministry had done anything wrong, saying it was his staff who had initiated corruption investigations. Speaking of allegations of fraud in the accounting for this season’s harvest, he suggested that “missing wheat” (wheat that either leaked from the system or was never harvested in the first place) amounted to just 4-4.5% of the harvest. He also blamed the House for shooting down the subsidy system he had initiated back in November, which would have paid farmers the average global price for their crop and a direct EGP 1,300 subsidy per feddan.

In an extended interview with Al Shorouk, Hanafy stated that only private sector silos were implicated in the wheat fraud. He did not reject a popular media talking point of the presence of the “wheat mafia” of businessmen who are gaming the system, but did not outright name anyone. He tacitly accused the committee of grandstanding in front of the media and blowing the issue out of proportion.

Kabil, Fayed face questioning today: The committee plans to call Trade and Industry Minister Tarek Kabil and Agriculture Minister Essam Fayed today. Kabil is being questioned as it was Industry Ministry’s General Organization For Export & Import Control which was meant to tabulate and monitor the wheat collected, while the Fayed is being called for his ministry’s central role in the collection process.

Better luck next time? Cabinet is now set to buy 2 mn tonnes of rice as the new harvest hits the market, Al Borsa reports.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.