Egypt Independent

Cabinet to challenge re-nationalization of cotton company



The cabinet is considering making a legal challenge to a court ruling annulling the privatization of the Nile Cotton Ginning Company, a prominent government official said on Tuesday. The official, who asked not to be named, said that the move is intended to protect the company from harm on the stock market.

An Egyptian court on Saturday annulled the sale of nearly 50 percent of the shares of Nile Cotton Ginning Company, which was part of the privatization plan adopted by the government in the 1990s. The ruling, issued by the State Council's Administrative Court, returned the company's shares and assets to the state.

According to the verdict, more than 50 percent of the company's shares were sold over three phases. The first phase was implemented on 6 February 1997, involving 3,028,900 shares. The second was on 9 October 1997, when 2,270,000 shares were sold. On 5 February 1998, 299 shares were sold.

The website of Egypt's state-run TV said the verdict cited several violations in the appraisal of the company's assets, most notably underrating the prices quoted for the shares.

Adel al-Mouzi, a candidate for the position of commissioner-general of the public business sector, told Al-Masry Al-Youm that it is impossible to re-nationalize privatized companies that have been floated on the stock market.

Mohamed Adel, a financial analyst, said that a report for the Egyptian Center for Economic and Social Rights on privatisation in Egypt, said that more than 50 companies were privatized through the stock market.

Translated from Al-Masry Al-Youm