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Tuesday, 7 August 2018

Gov’t to allow private sector to own just under 50% of a public sector holding companies

LEGISLATION WATCH- Gov’t to allow private sector to own just under 50% of a public-sector holding companies: The Public Enterprises Ministry has finished drafting amendments to the Public Enterprises Act that, if passed, would allow private-sector companies to own stakes of just under 50% in the ministry’s holding companies, according to a copy of the proposed amendments published by Al Mal yesterday. Under the current law, all ministry holding companies must be fully owned by the government. The draft amendments have been sent to the Madbouly Cabinet for review and would only become law after being passed by the House of Representatives and then signed into law by President Abdel Fattah El Sisi.

Is this a prelude to a holding company privatization program? As the government looks set to kick off the state privatization program this fall, the news adds interesting spice to an already much-anticipated program, suggesting the government could widen the scope of its privatization drive to include massive state holding companies.

The amendments also introduce private-sector-friendly board regulations, according to the draft. This would limit government seats on the boards of state holding companies to seven seats at most. It would also set a three-year term limit for the boards.

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