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Tuesday, 26 February 2019

Beltone pays Egypt’s FRA EGP 16 mn to lift investment banking suspension

Beltone suspension lifted after it pays EGP 16 mn settlement: Beltone Financial’s investment banking arm resumed operations yesterday after the company paid EGP 16 mn in a settlement with the Financial Regulatory Authority (FRA), the authority said in a statement (pdf). The FRA also cut to six months the period of time it is requiring Beltone’s brokerage arm to maintain an EGP 50 mn insurance cover. The regulator had imposed a six-month suspension of Beltone’s IPO unit late last year over alleged irregularities in its management of Sarwa Capital’s IPO, which saw the latter’s shares nosedive 11% in their EGX debut.

The FRA has also dropped a criminal complaint filed against the investment bank, FRA deputy head Khaled El Nashar told Bloomberg. The FRA agreed that “you don’t need to push more than this,” he said, adding: “I don’t think that this will happen again in the Egyptian market.”

Now would be a good time to clarify book building regs: There was no indication in the statement or in remarks from regulators yesterday whether the case will lead to new rules on how book building is run in Egypt. The FRA had alleged that Beltone broke rules on book building in the case, but the ultimate statement of claim by the regulator saw it zero in on aspects that are standard practice in the industry — and ask about book building software that simply doesn’t exit.

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