The company stated that all procedures related to the capital expansion were conducted in accordance with Egyptian law and upheld by a final Supreme Administrative Court ruling.
On his part, Tarek El-Nabarawy, head of the Egyptian Engineers Syndicate, said in a statement on Friday that the dispute with Jotun has persisted for over ten years amid the company’s repeated attempts to acquire the syndicate’s shareholding.
“Similar incidents have occurred before, using the same methods of deception and misrepresentation as we see now, aimed at increasing the company’s ownership stake at the expense of the syndicate’s rights. We have confronted these practices through all available legal channels since 2016 to safeguard the syndicate’s rights and to allow the subsequent council to continue the necessary procedures,” the statement said.
El-Nabarawy stressed that the syndicate will not sell any of its shares in Jotun, nor will it relinquish its stake.
“We will protect the syndicate's ownership with full strength and determination and will continue to confront the acts of fraud and misrepresentation pursued by the company’s management. We reaffirm our steadfast position in defending the syndicate's assets, undeterred by the ambitions of others, and we will firmly and responsibly confront any attempts that threaten its rights,” the statement added.
Since its founding in 1986, the Egyptian Engineers Syndicate has held a non-controlling minority shareholding in El Mohandes Jotun.
Amid Egypt’s ongoing foreign currency challenges, Jotun stated that it sought to increase its share capital to reinforce financial stability, ensure business continuity, and secure the foreign currency needed for raw material imports. The capital increase, the company noted, aligns with its long-term strategy to sustain and expand operations in the Egyptian market.
Before the increase, Jotun A/S offered El Mohandes Jotun a $60 million loan at one of the lowest interest rates available in the Egyptian market to support liquidity and stability. However, the Egyptian Engineers Syndicate declined the offer and filed legal objections to both the borrowing process and the capital increase.
Following a comprehensive judicial process, the Supreme Administrative Court issued a final ruling in favour of El Mohandes Jotun, confirming the company’s right to proceed with the capital increase in full accordance with Egyptian law. The process was conducted in coordination with the General Authority for Free Zones and Investment (GAFI) and other regulatory bodies.
After the ruling, the company completed the necessary procedures for the capital increase. The syndicate did not participate in the subscription process, which led to a proportional reduction in its ownership share, in line with legal requirements.
The company also clarified that it had extended an offer to purchase the syndicate's entire stake in El Mohandes Jotun at a premium exceeding independent valuations from two of the world’s leading Big Four auditing firms.
“Jotun A/S remains confident in the resilience of the Egyptian economy and its growth prospects,” the statement said, adding that the company’s ongoing investments aim to contribute to Egypt’s industrial and economic development.
Legal memorandum context and background
A legal memorandum issued by El Mohandes Jotun for Paints, Industrial and Marine Coatings – Jotun Egypt (S.A.E.) provided detailed clarification of the capital increase procedures, reaffirming their compliance with Egyptian law.
According to the memorandum, the Ordinary General Assembly Meeting (OGM) held on 13 July 2023 approved an increase of EGP 1.44 billion to strengthen the company’s capital base. The resolution was ratified by GAFI on 22 October 2023 and later upheld by a final judgment of the Supreme Administrative Court on 26 August 2025.
The company stated that all shareholders were duly notified of the subscription opening through announcements in two daily newspapers, in accordance with Article 99 of the Executive Regulations of Companies Law No. 159 of 1981.
The memorandum emphasized that publication in newspapers is a valid and sufficient method of notification, as expressly permitted by law. It also clarified that the shares were offered at their nominal value of EGP 10 per share and that the procedures followed were fully compliant with all legal and procedural requirements.
Addressing allegations of misrepresentation, the company said that all resolutions were reviewed and validated by GAFI and the administrative judiciary at all levels, confirming the absence of any irregularities.
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