(AFP Photo)
An Egyptian court has ruled in favour of allowing the listing of Sinai-based companies on the Egyptian Stock Exchange (EGX). The move comes despite the escalation of fighting in the Sinai Peninsula between radical groups and the armed forces.
The ruling is only in favour of Sinai-based companies which were founded before 2005,the year in which Law 94/2005 was issued to amend Article 17 of Law 159/1981. According to the rule, these companies can be listed without the need to obtain the approval of the President of the General Authority for Investment and Free Zones (GAFI).
Nabq Sinai for Hotels Company had sought with GAFI for an EGX listing, but its request was refused. The company filed a complaint with the Administrative Court against EGX, GAFI and the Sinai Development Agency (SDA).
Head of the Egyptian Financial Supervisory Authority (EFSA), Sharif Sami, expressed his surprise on the court’s decision, saying that GAFI’s approval was required for security reasons.
“What changed in the security situation in Sinai? It is still unstable,” Sami commented. “The approval requirement was not related to economic or financial conditions but mainly related to the security conditions.”
Sami explained that the listing of Sinai companies was under the control of GAFI for special security cases, such as foreign companies which seek EGX listing or acquiring shares in it. He noted that listing in the stock market requires restrictions or hard conditions for security reasons.
Sami said the ruling may have been issued in parallel to a law that allows Egyptian citizens with Egyptian parents to own land in the Sinai Peninsula, which was forbidden prior tothe 25 January Revolution.
Meanwhile, Nabq CEO Hossam Atiya said the decision is a positive outcome. He refused, however, to disclose the percentage of shares which will be debuted on the EGX following this decision.
