Egypt’s financial regulator has suspended a joint venture deal between Egypt’s largest investment bank EFG-Hermes and Qatar’s Q-Invest, approved by shareholders on June 2, the state news agency said on Wednesday.
“The Authority approved the assembly in form but refused it in terms of content, procedures and decisions,” the head of the Egyptian Financial Supervisory Authority (EFSA) Ashraf El-Sharkawy was quoted as saying to the state news agency MENA.
EFSA rejected decisions made at EFG’s annual meeting last month because the firm did not clarify various points regarding the deal including the fate of minority rights after it is completed, MENA cited Sharkawy as saying.
Although the announcement does not mean the deal has been cancelled, in the ongoing struggle for control of the Egyptian investment bank, all options had appeared to be on the table for Planet IB, the consortium seeking to take over EFG-Hermes. Planet had appeared to be forging ahead with its plans to acquire EFG despite shareholders approving a tie-up with Qatar’s Qinvest earlier this month.
The EFG’s chairperson told Al Arabiya TV earlier in July that going back on the Qatari deal would “open the gates of hell” saying it was not possible for EFG to open its books for due diligence as requested by Planet IB because the bank’s shareholders had already voted at their general meeting in Cairo on June 2 to go ahead with a planned partnership with Qinvest, a unit of Qatar’s Islamic Bank.
“Right now it is not possible to open our books for due diligence now that we have signed the agreement with Qinvest and the extraordinary general meeting approved this offer,” Mona Zulficar, chairperson of EFG-Hermes’s board had told Al Arabiya in a report on June 7. “Legally, we cannot take a decision on this issue. It is against the law to enter into negotiations with a different party,” she added.