** #1 FRA says Beltone suspension was due to “irregularities” in Sarwa IPO: The Financial Regulatory Authority (FRA) suspended Beltone Financial’s investment banking unit for six months after an investigation allegedly found the initial public offering of structured and consumer finance player Sarwa Capital last month was “marred by some financial market irregularities,” FRA Deputy Khaled El Nashar told Reuters on Sunday. He did not specify what those alleged irregularities were.

Beltone has filed an appeal to challenge the FRA decision. A senior exec at the firm told us overnight that Beltone has yet to be informed of the exact allegations against it.

Investor complaints prompted the investigation, not the drop in Sarwa’s share price at IPO: The FRA opened its investigation after some investors filed complaints about the IPO, sources told Al Mal, stressing that the aftermarket share performance was not the cause of the investigation. One investor speaking to the newspaper said that Beltone had advised him demand for Sarwa was so high, he should place an order for 400k shares during the subscription period to ensure an allocation of 100k shares — only to find he had been allocated the full 400k shares. The company’s shares closed down more than 11% in their EGX debut amid the same Emerging Markets Zombie Apocalypse that shortly after prompted the government to delay its own share-sale plans.

It is still unclear what, if any, connection there is between the suspension and a bid by Beltone’s parent company for c. 30% of Sarwa. The FRA decision (pdf) last Thursday to suspend the firm came only a day after Naguib Sawiris’ Orascom Investment Holding (OIH), which owns Beltone Financial, said it was looking to acquire a non-controlling stake of at least 25% in Sarwa Capital. Sarwa’s shares jumped 10% after OIH’s announcement, closing at EGP 6.17 on Wednesday (the day of the announcement).

What of Beltone’s IPO pipeline? Giza Spinning and Weaving is committed to having Beltone Financial quarterback its upcoming IPO despite the FRA decision, managing director Fadel Marzouk told Al Mal. Giza Spinning was planning to sell 40% of its shares in 4Q2018, but postponed the offering amid the slump in local and global equity markets, Marzouk said. Marzouk’s statement suggests that the IPO will be pushed back at least another six months.

Market reacts: Beltone Financial’s shares fell as much as 8% on Sunday, closing at EGP 6.60 while Sarwa Capital’s shares dipped 1.43%, closing at EGP 6.21.