The investment bank's Cairo HQ (Photo: Reuters)
Egypt's top financial watchdog, the Egyptian Financial Supervisory Authority (EFSA), has declined to approve a planned joint venture between Egypt's largest investment bank, EFG-Hermes and Qatar's QInvest, according to a statement sent to the Egyptian stock exchange.
EFSA rejected decisions approved by EFG shareholders last month because the firm did not clarify points including minority rights, state news agency MENA reported on Wednesday. EFSA stated that additional disclosure was necessary before any possible deal could be given the green light.
EFG-Hermes said in a statement to the bourse Thursday that it would call another extraordinary shareholder meeting soon to provide the additional disclosure EFSA requires in order to move forward, "as we are committed to full transparency."
A tie-up between EFG-Hermes and the Qatari group was approved by EFG shareholders in June. The bank announced in May that it had sealed an agreement to form a region-wide investment bank with Qinvest.
Under the terms of the deal, Qinvest would control 60 per cent of the new bank, which will be called EFG Hermes Qatar, and would provide $250 million to increase its capital.
In July, an attempt by a group of Egyptian and Arab Gulf investors (Planet IB) to buy EFG-Hermes stalled after the consortium failed to secure enough EFG shares to make a takeover possible.
Planet IB made its $1 billion approach after the Cairo-based bank approved the joint venture deal with the Qatari group.