Leading Egypt-based investment bank EFG-Hermes holding company board member and CEO Hassan Heikal stepped down to focus on public service, the firm announced in a press release on Monday.

Heikal’s resignation, after 18 years with EFG-Hermes, will become effective 31 October.

In May 2012 the executive was indicted, along with co-CEO Yasser El-Mallawany, for alleged insider trading and stock manipulation regarding the 2007 sale of Al-Watany Bank of Egypt to the National Bank of Kuwait.

EFG-Hermes has suffered from its association with the fallen Mubarak regime since Egypt’s January 2011 Revolution which brought it down.

The deposed president’s sons, Gamal and Alaa Mubarak, are stakeholders in Bullion Company Ltd which established EFG-Hermes Private Equity in 2003 and in which it owns a 35 percent stake.

Gamal and Alaa Mubarak are among the defendants in the Al-Watany Bank case with the EFG-Hermes executives.

The investment bank saw its net profit for the first six months of 2013 drop by 53 percent compared to the same period a year before, and a net loss of LE29 million in the second quarter of 2013, due to regional conditions resulting in impairment charges, including some related to legacy investments.

In May, a merger with Qatari QInvest fell through when the Egyptian Financial Supervisory Authority refused to approve the year-old joint venture deal between the two firms, which would have given EFG-Hermes a much-needed $250 million boost.

The regulator had said that that EFG-Hermes Qatar LLC – a joint venture owned 60 percent by QInvest, 40 percent by EFG-Hermes, which targeted fully buying the latter’s main operations – did not meet the ‘experience requirements’ stipulated in the Egyptian Capital Market Law.

After the setback, EFG-Hermes announced it planned to trim costs to LE500 million ($72.11 million) in 2014 from LE780 million in 2013.

Later in May, the firm was dealt an additional blow when it was excluded from the MSCI Egypt index, which sent the share price plummeting to an eight-year low.
Heikal announced in his resignation notice the intention to put his expertise to use in solving Egypt's economic woes.

“With my responsibilities at the firm drawing to an end, I will take this opportunity to focus on public service," said Heikal, "by offering ideas and launching new initiatives that offer long-term solutions to Egypt’s fiscal challenges and economic development.”

Established in 1984, the investment bank is listed in Egypt’s main index, with a current market capital of LE4.2 billion.

The share was trading down 0.67 percent on Tuesday morning, its first trading session since Heikal’s resignation was formally announced.