Egypt regulator, ex-bourse head under probe
Cairo, July 14, 2010
An Egyptian prosecutor is examining whether the head of the country's financial regulator along with the former chairman of the bourse broke the law, following complaints by investors, according to a statement.
A complaint was filed by a lawyer on behalf of several investors against Egyptian Financial Supervisory Authority (EFSA) chief Ziad Bahaa el-Din and the former stock exchange head Maged Shawky, the public prosecutor said in the statement on Tuesday.
A court source, citing the complaint, said the two executives were accused of issuing 'decisions that made profits for some companies at the expense of others' along with taking decisions that harmed the Egyptian economy.
'The prosecution has asked for information from some specialised authorities about what the complaint contained to find out if there were legal violations or not,' the prosecution statement said.
The statement went on to say the two executives had 'issued administrative decisions to stop' some brokerages from working.
However, the public prosecutor denied Egyptian media reports that either of the men had been called for questioning.
Bahaa el-Din played down the investigation.
'There could be an accusation filed by some citizens and that is their right and happens all the time, but nothing happened more than that,' Bahaa el-Din told Reuters.
News of the investigation comes days after Shawky's decision to quit was announced and a replacement named.
New stock exchange chief Khaled Serry Siam, whose appointment by the prime minister was announced on Saturday, said he would seek to renew investor confidence in the bourse.
Egypt is popular with foreign direct and portfolio investors, who like its solid growth prospects and proximity to European markets.
But some market analysts say the stock market needs to increase new listings and delist more illiquid stocks and could improve corporate transparency.
'Increasing confidence in the bourse will be among the main priorities in the coming period,' the new bourse head, Siam, who had been a deputy head of EFSA, told Reuters on Sunday.
Egypt's shares have performed relatively well throughout the global financial crisis. In 2010 so far, the index has dipped 2.9 percent, compared with a 3.9 percent fall in the global emerging market index.
The benchmark index has risen more than 30 percent since the end of 2008. Economic growth is hovering around 5 per cent, dipping from about 7 per cent pre-crisis.-Reuters