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Egypt eyes $1 bn 'reconciliation' deal with fugitive tycoon Salem

Government may reach settlement with fugitive Egyptian businessman Hussein Salem – known for his controversial gas-export deal with Israel – as early as next week, say prosecutors

Ahram Online, Thursday 9 May 2013
hussein salem
Hussein Salem
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Prosecutor-General Talaat Abdullah is expected to approve a 'reconciliation' deal with fugitive Egyptian businessman Hussein Salem by next week, Mostafa El-Husseini, head of Egypt's Public Funds Prosecution, told Ahram Online Thursday.

El-Husseini expected Abdullah to approve the settlement, describing Salem's offer as "serious." The reconciliation deal with Salem could be done either through Salem's surrendering his assets inside Egypt to the government or by selling them off before offering a cash payout, El-Husseini explained.

State daily Al-Ahram reported that Salem could pay the government as much as LE7 billion (roughly $1 billion), in which case outstanding charges against him would be dropped.

Earlier this month, Salem's lawyers made an offer to the North Cairo attorney-general in which their client would give up 75 percent of his financial assets in Egypt and 55 percent of his wealth in Spain.  

El-Husseini stressed that the government would probably finalise the settlement deal with Salem so as to avoid interference by international arbitrators.

Once a settlement is reached, Salem has been asked by public prosecutors to attempt to persuade shareholders in his East Mediterranean Gas (EMG) company – which had been responsible for delivering Egyptian natural gas to next-door Israel – to drop their demand for $9 billion in damages from Egypt owing to the latter's termination of its gas-export deal with Israel.

In April of last year, a 20-year gas-export deal with Israel was cancelled by Egypt following a year of sabotage against the gas pipeline, which had repeatedly disrupted the flow of natural gas.

"Salem was a shareholder in this international company [EMG], and he could probably convince them [current shareholders] to drop their demands," El-Husseini said.
  
Salem was a founding shareholder in EMG and reportedly contributed $95 million to EMG's paid-up capital. In 2008, he sold his stake in EMG to a global consortium that included Thailand's state-owned PTT PLC.

Salem, who fled Egypt during the January 25 2011 revolution and had been a close associate of ousted president Hosni Mubarak, currently resides in Spain.

In March of last year, Salem was slapped with a 15-year jail sentence in absentia for illegally acquiring public property. He was also sentenced to 15 years in June of last year for squandering public funds in regards to the gas deal with Israel, before Egypt's Cassation Court ordered a retrial in March of this year.

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