Egypt’s Eastern Company listed 4.5% of shares on stock market
The Eastern Company’s public offering, which resulted in Saudi investors buying 25% of the listing worth $23 million, raises questions about illicit profits within the government.
CAIRO — Member of parliament Haitham al-Hariri submitted March 12 a briefing request to Minister of Public Business Hisham Tawfik on his Feb. 28 listing of 4.5% of Egypt’s state-owned Eastern Company on the Egyptian Exchange. Tawfik has yet to respond.
The Eastern Company is Egypt’s top tobacco-maker and the second-largest source of revenue for the state budget after the Suez Canal Company. The company’s revenues are estimated at 55 billion Egyptian pounds ($3.17 billion) for fiscal year 2019.
The company’s shares were listed in a private offering after the end of the trading session on the stock market at a value of 1.721 billion pounds ($99 million). The listing targeted top investors, mainly Emirati investor Mohammad al-Ghobar, in addition to Saudi businessmen who bought 25% of the listing worth 400 million pounds ($23 million).
Hariri believes this listing to be in direct conflict with the rules of transparency and disclosure governing international stock exchanges, because the shares were listed below their fair value, causing losses of nearly 700 million pounds ($40.4 million).
