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Sunday, 9 June 2019

State Council adjourns Medhat Khalil’s lawsuit against FRA to July

DISPUTE WATCH- Medhat Khalil seeks Justice Ministry intervention in dispute with FRA: Raya Holding’s Chairman Medhat Khalil filed a request with the Justice Ministry’s dispute resolution committee to mediate in ongoing disputes with the Financial Regulatory Authority (FRA). Khalil is looking to cut down or overturn fines (details below) in connection with a mandatory tender offer forced on him by the FRA, Al Mal reports. The FRA is also alleged to have blocked Raya’s bid to acquire a license to set up a firm that would specialize in securitized debt offerings. Separately, the Council of State (Maglis El Dawla) has postponed to July its next hearing in a separate case filed by Khalil to quash the fine.

Background: The FRA alleges Khalil failed to pay an EGP 11 mn fine handed out after he exceeded the maximum ownership limit in Raya without making a mandatory tender offer (MTO).The FRA had ordered Khalil at the end of last year to submit an MTO for Raya or sell down his stake, arguing that he and related parties controlled a combined 42% of the company — a level of control that triggers the requirement for an MTO under securities regulations. Khalil bought 26.7% (56.919 mn shares) of Raya Holding through his El Pharonia Real Estate Investment at a cost of EGP 314.76 mn in an MTO.

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