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Wednesday, 17 July 2019

Egypt court upholds renationalisation of cotton company

Supreme Administrative Court irrevocably annuls privatisation of Nile Cotton Ginning Company

Ahram Online, Monday 30 Sep 2013
Nile Cotton Ginning Company workers
Nile Cotton Ginning Company workers' protest infront of Egyptian cabinet of ministers, 24/5/2009. (Photo: Sarah Carr flicker)
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Egypt's Supreme Administrative Court has upheld a ruling invalidating the privatisation of the Nile Cotton Ginning Company (NCGC).

Sunday's appeal ruling, which is final, upholds a December 2011 court ruling ordering the company's renationalisation.

The court ruled the ministerial committee for privatisation, which privatised the company by listing it on Egypt's stock exchange in 1997, did not have the legal authority to sell or even manage state-owned companies.

It was not until 2006 that then prime minister Ahmed Nazif issued a legal amendment allowing the listing of public sector companies on the stock market, meaning previous attempts to do so were illegal, the court said.

Explaining the rationale behind its ruling, the court said expanding the private sector's share in public sector companies was a "suspicious policy" that mingled politics with legal matters.

Nile Cotton Ginning Company was one of several companies involved in a privatisation programme in which 100 percent of its equity was sold to the public, according to the court.

The financing and supervision of the programme by foreign agencies, notably USAID, undermined Egypt's sovereignty, the court added.

Since the 2011 revolution which overthrew long-time autocrat Hosni Mubarak, the judicial system has issued at least 11 rulings annulling privatisation deals made during his tenure.

On Saturday, the Administrative Court overturned an appeal filed against the renationalisation of Tanta Flax and Oil Company, which was privatised in 2005. 

The court ruled against the company's privatisation in September 2011 because it had been sold to Saudi investor Abdel-Ellah Al-Kaaky for less than its true value. 

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