Back to the complete issue
Monday, 25 July 2016

Parliament now wants to probe minority rights in the EGX

First it was GDRs. Now the House wants to probe minority shareholder rights on the EGX? House of Representatives Speaker Ali Abdel Aal is considering approving a request by 20 MPs to form a committee to monitor what he called “the poor management” of the EGX and “the constant losses [incurred by] minority shareholders,” Abdel Aal said, according to Al Mal. No other details of the MPs’ request were given beyond acknowledging that the EGX is run by an independent authority. With the EGX up more than 6% YTD and no recent scandals that stand out in our memories, it’s unclear why the House is suiting-up to do battle on behalf of minority shareholders.

In fact, the Ismail government is already moving on that front: Investment Minister Dalia Khorshid announced back in June that her ministry would amend aspects of the Capital Markets Act on the rights of minority shareholders, while the Egyptian Financial Supervisory Authority changed listing regulations back in April to further protect minority shareholders rights. This is the second time in a week that Parliament has called for a probe of the EGX, with House Economics Committee chairman Ali Moselhy calling for closed-door hearings into the use of GDR trades to obtain FX abroad.

In other EGX news, the Investment Ministry is reportedly considering reversing regulations that force the execution of EGX deal market transactions valued at more than EGP 100K under CBE-approved banks and not brokerage firms, said Mohamed Maher, deputy head of the Egyptian Capital Markets Association (ECMA). These regulations, imposed by EGX Chairman Mohamed Omran in late May, have led to the cancellation of a number of transactions, prompting the ECMA to recommend their reversal to the Investment Ministry. Maher tells Al Borsa that litigation over the decision was unlikely. As we noted back in June, deal market transactions fall under the EGX’s over-the-counter market regulations which govern trading and transfer of the ownership of the companies not listed on EGX and for capital increases of listed companies not yet under the Egyptian Financial Supervisory Authority. Requests for exceptions are presently on a case-by-case basis.

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.