Egypt's Administrative Court ruled the annulment of the privatisation contract of the Arab Company for External Trade (ACET) Saturday, following a law suit claiming the company was sold at a price significantly lower than the value of its assets.
The Egyptian Center for Economic and Social Rights (ECESR), an influential anti-privatisation body, says on its website that ACET was sold in 1999 for LE13 million ($2.1 million) to private investors Fouad Iskandar and Samir El-Adly. At the time, the company held standing assets worth more than LE400 million, ECESR claims.
Details of the court order have not been released yet.
The law suit was raised by activist Hamdi El-Fakharany, more known for filing the controversial case against real estate developer Talaat Mostafa Group claiming corruption in land appropriation.
ECESR also says that only 50 per cent of ACET's sale value was paid to the government by the investors, for whom the company was originally indebted.
Accordingly, ECESR demanded that investigations should be opened with then Prime Minister Kamal El-Ganzouri and all officials involved in the case. Ironically, El-Ganzouri is Egypt's newly appointed prime minister.
In September, a court ordered that three privatised companies be renationalised following a similar law suit claiming their sale deals were corrupt. The three companies are Shebin El-Kom Textile Company, the Tanta Company for Linen and Derivatives and the Steam Boilers Company.
The court's decision, however, has not yet been implemented as the Egyptian government is taking the case to appeal. The ambiguous situation has left employees at the affected firms in limbo, as the private owners of the companies are reluctant to pay salaries awaiting a final decision. This has led workers to take to the streets and demand a quick resolution to the legal case.