CAIRO: Egypt’s financial regulator accepted a settlement whereby Samih Sawiris, chairman of Orascom Hotels and Development, will pay a compensation of LE 20 million to drop a jail sentence.
A court recently made an initial ruling to jail Sawiris over accusations of stock price manipulation and providing incorrect financial data. The firm then appealed the ruling.
Sawiris was served the two-year prison sentence on Aug. 27 because he is the company’s legal representative, Reuters reported citing an Orascom statement. The court also fined him LE 50,000 ($8,401) and said he must not trade in the stock market for a year, a judicial source said last week, quoting the economic court’s ruling.
The head of the Egyptian Financial Supervisory Authority (EFSA) accepted the settlement, which they said upholds the criminal penalty while “preserving the stability and operations of the company and protecting the interests of investors, without breaching civil rights.”
The EFSA said it was primarily concerned with its mandated role, protecting the rights of the shareholders of listed companies, and preserving the stability of the financial markets.
Sawiris submitted a settlement request to the EFSA, in accordance with Article 16 of Law 2009/10, which allows the regulatory body to settle such claims.
The main allegation was that parent firm Orascom Development Holding AG misrepresented the percentage of its ownership in subsidiary OHD.
The allegation centered on a discrepancy between the 98.16 percent stake shown in company financial statements and the 96.14 percent legal ownership given in a shareholders register.
The difference was due to an earlier non-recognition by Egypt’s financial markets watchdog of a 2 percent ownership transfer which took place in December 2008, Orascom said.
"It is important to note that this 2 percent economic interest in OHD has been recognized, audited, and approved by the company’s auditors and is in full compliance with the International Financial Reporting Standards," it said. –Additional reporting by Reuters
