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Sunday, 27 January 2019

Beltone en route to lose appeal against Egypt’s FRA

Advisory body reportedly recommends court turn down Beltone’s appeal of its suspension. The Administrative Court received yesterday a report from the Board of State Commissioners recommending it reject Beltone’s appeal a suspension handed to the investment bank’s IPO unit by the Financial Regulatory Authority, reports Al Shorouk. The report found that while Beltone’s lawyers correctly followed legal procedure in filing the appeal, the appeal itself is groundless. We had reported earlier this month that the court referred the appeal to the board of commissioners following the most recent hearing; yesterday was the deadline for the report.

Is Beltone looking for a settlement? Both Al Masry Al Youm and Youm7 claim Beltone’s legal counsel had said the investment bank is pushing for a final settlement and will drop its appeal. Al Shorouk, however, cites sources close to the matter as saying the reports were not true.

Losing the appeal could pave the way for the FRA to bring a criminal case against Beltone executives, an unnamed government source told Al Shorouk. This comes after it emerged earlier this month the authority is lining up criminal charges against the company and had asked prosecutors specializing in financial crime to take on the case.

Background: The FRA suspended late last year Beltone’s investment banking IPO unit for six months over alleged “irregularities” in its management of Sarwa Capital’s IPO, which saw the structured- and consumer-finance player’s shares nosedive by 11% on their EGX debut. The authority also ordered Beltone’s brokerage arm to raise its insurance cover to EGP 50 mn and maintain it at that level for a year. The company denied the allegations and has pursued legal action against the FRA’s decisions. Its plea to the FRA’s appeals committee has been turned down.

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