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Banks

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The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

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Categorized | Banks

Egypt bank defends graft-charge executives


Posted on May 31, 2012

EFG-Hermes, the Cairo-based investment bank, said on Thursday that it stood by its two chief executives who have been charged with insider trading in a case which also involves the two sons of Hosni Mubarak, the ousted Egyptian president.

Hassan Heikal and Yasser El Mallawany have been named in an investigation into the 2007 sale of Al Watany Bank of Egypt, a listed company, to the National Bank of Kuwait.

    EFG-Hermes, the Middle East’s leading investment bank, said that it affirmed “the soundness of its legal position” and that of its two executives.

    “The company confirms that no advantage or personal benefit accrued to the two executives and that they were not involved in any transactions or share dealing on their own behalf in relation to Al Watany Bank,” said a statement by EFG-Hermes.

    It said it would take all necessary legal action to “defend its position in this matter”.

    Prosecutors cited in Egyptian state media said Alaa and Gamal Mubarak, along with the bank’s two chief executives and a former CEO, had been charged with corrupt stock exchange dealings worth more than $400m in connection with the sale of Al Watany Bank.

    Gamal Mubarak owns an 18 per cent stake in EFG’s private equity subsidiary which he acquired in 1997 before he became involved in Egyptian politics. The younger son of the toppled dictator, he was widely considered his heir apparent for most of the last 10 years.

    A court is due to rule on Saturday on separate corruption charges against the brothers and their father. At the same hearing the court will also hand down its much-anticipated verdict on complicity to murder charges against the former president in relation to the killing of hundreds of demonstrators during last year’s uprising.

    Hani Sarieledin, a lawyer for EFG, told the Financial Times that the bank’s private equity subsidiary managed the Horus Fund II which held a 10 per cent stake in Al Watany before its sale to Kuwait National Bank.

    He said Gamal Mubarak was not an investor in Horus and neither was EFG, which earned management fees and a percentage on capital gains.

    Mr Sarieldin said Horus was among investors holding 46 per cent of Al Watany who signed a marketing agreement with EFG-Hermes in December 2006 to find a buyer for the bank.

    The charges, he explained, arose from their non-disclosure of the intention to sell until March 2007 when they received letters of intent from prospective buyers.

    But Mr Sarieldin said there was no breach of the law or of capital market regulations.

    “They were not obliged to disclose anything until they had a potential buyer,” he said. “In fact, because the bank’s global depository receipts are traded in London, they were given legal advice by an international law firm not to disclose because it would be considered price manipulation.”

    The timing of the new charges against the Mubarak brothers, just a few days before the court ruling, has provoked speculation that the country’s military rulers are sending a message that they intend to maintain a tough stance on the family of the former president irrespective of the result in the other case.

    Ahmed Shafiq, a former member of the military, is one of two finalists who will contest the second round of the presidential election on June 16. Many Egyptians have expressed fears that if he is elected he might pardon the Mubaraks if they are convicted. Some observers say the latest moves against his sons are meant to signal that such an outcome is unlikely.