Court fines Raya’s Medhat Khalil more than EGP 110 mn
DISPUTE WATCH- Court hands Medhat Khalil the largest fine in Egyptian capital market history: The Cairo Economic Court yesterday ruled in the Financial Regulatory Authority’s (FRA) favor in its long-running dispute with Raya Holding’s Chairman Medhat Khalil, according to Al Masry Al Youm. Khalil allegedly failed to pay an EGP 11 mn fine to the FRA after he was found to have exceeded the maximum ownership limit in Raya without making a mandatory tender offer (MTO). The court yesterday fined Khalil and his associates EGP 200k each and ordered them to pay back the value of shares gained as a result of failing to make the MTO (around EGP 110 mn). This has set a record for the highest fine in the history of the Egyptian capital markets.
Background: The FRA ordered Khalil at the end of 2018 to submit a MTO for Raya or sell down his stake arguing he and related parties controlled a combined 42% of the company — a level that triggers an MTO under securities regulations. The FRA then sued Khalil after he failed to pay a fine. Khalil, who was seeking to reduce or overturn the fine, had requested that the dispute resolution committee act as the mediator, to which the FRA insisted that its own committee should mediate the dispute, and a new dispute arose back in July.
This still isn’t over yet: The group's legal advisor Hany Khalil said he will appeal the verdict immediately, and accused FRA chief Mohamed Omran of abuse of power, according to the local press.