Egypt court confirms annulment of textile co. privatisation
The Shebin El-Kom Textile Co. becomes the latest in a string of privatisation contracts annulled by judges that view the deals with suspicion
Ahram Online, Monday 21 Jan 2013
Workers form Mega Textiles and Shebin El-Kom take to the streets to protest (Photo: Yassin Gaber)
Egypt's administrative court rejects the government's appeal against the suspension of the privatisation contract for Shebin El-Kom Textile Company. In effect, the court ruling permanently annuls the sale of the publicly-owned textile company.
In September 2011, an Egyptian court cancelled the privatisation deal of three previously public-sector companies and ordered them to be returned to the government. They included Shebin El-Kom Textile Company, Tanta Company for Linen and Derivatives and the Steam Boilers Company.
The government appealed the ruling, preferring to sell the companies, but announced on several occasions it would respect court orders.
This is the second government appeal to be rejected in privatisation-related deals. In December, a court confirmed yet another ruling to cancel the privatisation deal of Steam Boilers Company, currently owned by Orascom Construction Industries.
Cement maker Assiut Cement, owned by conglomerate CEMEX was also ordered to be returned to the state.
After the appeal is rejected, it is considered final and the government must return all amounts it received during the privatisation process and retain ownership of the companies.
The court said that although sales to private owners was necessary due to the conditions placed on Egypt by international institutions in order to secure loans, a post-uprising review of Mubarak-era privatisation procedures raised suspicions of corruption, conflict of interests and a lack of transparency.