Egypt's EFG defends executives against graft charges

Egypt’s EFG defends executives against graft charges

The Qatar-based directors of Syria International Islamic Bank (SIIB) resigned their roles at the behest of the Gulf Arab state's central bank, to comply with U.S. Treasury sanctions against the lender.

May 31, 2012 5:35 by Reuters

Egyptian investment bank EFG-Hermes on Thursday said it would defend its two chief executives against accusations of illegal share dealings.

Yasser El Mallawany and Hassan Heikal were referred to trial on Wednesday alongside the two sons of deposed President Hosni Mubarak as part of a probe into the dealings, according to the public prosecutor.

They are accused of violating stock market and central bank rules to make unlawful profits through the trading of shares in Al Watany Bank of Egypt, a listed bank.

In a statement, EFG affirmed the “soundness of its legal position” in regard to the 2007 acquisition of Al-Watany Bank by National Bank of Kuwait.

“The firm also confirms in this context that its two Chief Executive Officers have no personal dealings, interests or benefits in any transactions related to the trading on Al-Watany Bank of Egypt’s shares,” EFG said. “The firm is taking all necessary legal action to defend its position in this matter.”

EFG said the accusations had not affected the bank’s operations in any way and it expressed full support and confidence in the two CEOs.

Gamal Mubarak took an 18 percent stake in EFG’s private equity arm when it was formed in 1997. He and his businessman brother Alaa are already standing trial with their father on separate graft charges.

EFG Hermes Private Equity accounts for no more than 7 percent of EFG Hermes Holding’s total consolidated revenues, the bank said.

(Writing by Edmund Blair and Tom Pfeiffer; Editing by Erica Billingham)