Egypt sacks former PM Obeid from AIB chairmanship

Egypt's cabinet removed former prime minister Atef Obeid on Thursday from his post as chairman of Arab International Bank (AIB), a specialized financial institution exempt from Egyptian banking regulations.

Since a popular uprising forced president Hosni Mubarak to step down in February, Egyptian prosecutors have been investigating corruption allegations made against former officials and businessmen connected with his 30 years in power.

Egypt's public prosecutor on Wednesday sequestered funds belonging to Obeid as part of a probe into alleged squandering of public funds relating to the sale of state-owned Assiut Cement, a local affiliate of Mexican company Cemex, the state news agency MENA reported.

Obeid, who could not be immediately reached for comment, was banned from travel out of Egypt on Feb. 23, 12 days after Mubarak was forced from office by mass street protests.

Obeid was premier in 1999-2004. He resigned under increasing pressure from business leaders demanding faster privatization.

Bankers say AIB's special status has made it popular with wealthy Egyptians for the discreet services it provides, according to Reuters.

When asked to confirm that the cabinet ordered the removal of Obeid from the AIB helm, cabinet spokesman Magdy Rady said: "Yes". He was responding via text messaging.

The 1974 treaty establishing AIB exempts it from Egypt's bank, credit, foreign exchange and auditing requirements. Its documents and files are immune from judicial, administrative and accounting control and inspection rules, AIB's website says.

The Egyptian and Libyan governments each hold a 38.8 percent stake in AIB. Qatar and Oman also have stakes as does the government-owned Abu Dhabi Investment Authority.