Investigations

Atef ElSherif

Alborsa

  • February 20, 2018

    The Founding Partner of the Law Firm said in his interview with Alborsa:

    ElSherif restructures food company in which its investments amount to EGP 4bn during one year.

    By Mahmoud El Kasas & Ahmed Farahat

    We have 3 IPOs in EGX in food, health and industry sectors.

    The application of legislations to facilitate procedures and ensure their usefulness, is more important than the issuance of laws. Despite their importance to reassure investors according to Atef Yassien ElSherif, the founding partner of ElSherif Law Firm & Consultants.

    ElSherif stated in an interview with Alborsa that Egypt was one of the first countries to issue corporate laws since the 19th century, stressing the need to communicate the philosophy of law to those who maintain it and what has been done in the laws of investment, corporate and bankruptcy is a great effort.

    Next week, A EGP 1.5bn debt settlement agreement shall be signed.

    Incorporating Speed S.A.E as a first approval company in the Egyptian market and we look forward to expanding at Arab level.

    Incorporating a private university in which its investments amount to EGP 400m for Egyptian investors.

    Applying the legislative amendments is more important than its issuance.

    ElSherif stated that the amendments of investment law include general and special incentives however most of them have already included in the previous law as well as new additional incentives to direct the investment towards new areas and this is considered as a good step to achieve the comprehensive development, use the human resources and eradicate decentralization.

    ElSherif explained that in reality, there is a tangible improvement of GAFI’s performance. Whereas incorporating companies’ processes do not take more than 5 days and in some cases it does not take more than 24 hours.

    ElSherif cleared that adding approval offices to the new investment law is a milestone to reduce the burden on GAFI and to work according to the international standards. ElSherif noted that the partners of the law firm incorporated Speed S.A.E for approving as a first approval company in the sector; also the law firm incorporated Hank Gains S.A.E for promoting the investment internationally.

    ElSherif added that focusing on caring about the Egyptian market by the Arab investors encourages our law firm to contract with one of the Emiratis law firms which provides legal and financial services to the companies. The law firm shall be opened after obtaining the licenses during 6 months.

    ElSherif stated that doing business in the governorates is a fertile ground for transactions and there is a thirst for investment. We study opening branches of our firm in Domyat, Port Said and Upper Egypt.

    He also said that the amendments of the investment law require that the incorporated companies shall deposit their shares in the central depository system at MCDR in which it facilitates M&A process in OTC market, listing on EGX and preparing for an IPO in addition it will cancel many paper transactions in which they sometimes have to cancel some transactions later.

    ElSherif praised applying stamp tax because of its easiness calculation comparing to capital gains tax, noting that the cost of investment in EGX is high comparing to the other markets, assuring that, “we do not against applying taxes but it shall be fair among the investment tools”. He stated that the bank deposits are not taxable in spite of the highness of the investment risks in the stock market comparing to the bank deposits, “The logic of power is the referee in the imposing taxes mechanism in the Egyptian market and the capital market did not find whoever defends it.”

    ElSherif Law Firm & Consultants is managing many transactions in the Egyptian market including restructure and merger as a step for an IPO.

    The founding partner revealed the restructuring of a company operating in the food sector through the merger of three companies under the umbrella of one holding company by swapping shares to be ready for the IPO, noting that the value of the new company shall exceed EGP 4bn and it was anticipated that 30% of the capital shall be traded on EGX during the second half of 2018 by capital increase.

    He also added that the law firm restructures two companies; one of them belongs to the medical sector and the other one belongs to petroleum services sector to be traded on EGX next two years.

    ElSherif believes that the success of the recent proposals in the stock market had a strong reaction to the investors' ideas towards the stock market for funding in view of the high interest rates during the last period.

    On the funding processes, ElSherif stated that the firm is in charge of negotiating a $90m settlement agreement on behalf of our client and such agreements shall be signed with the banks next week.

    Atef ElSherif considered that the education sector is one of the promising sectors in the market, noting that the firm is incorporating an Egyptian company to establish a EGP 400m private university in Upper Egypt. The university will start with 5 colleges and the licenses shall be obtained soon.

    In litigation section, the firm is a legal consultant for Saudi investors who own 16% of GM Egypt by which they filed lawsuits before Cairo Economic Court to suspend capital increase resolutions that were passed by the general assembly and supervise board resolutions especially after the company suffered heavy losses last year. In addition to joining the arbitration suit which is heard by CRCICA against Porto because of the dispute between the company and the Syrian party regarding the non-completion of establishing Porto Tartous.

    Atef ElSherif

    Alam Al Mal

  • December 3, 2017

    The new investment law is an expression of confidence between the government and investors

    By Farouk Youssef

    Recently, the state sought to draft many economic laws for creating an integrated system to motivate and incentivize the investors. The investment law is deemed to be on the top of such economic laws such as capital market law, bankruptcy law, SMEs law, labour law, corporate law.

    Atef ElSherif, former EGX chairman, affirmed that drafting such laws means that the government has a clear and transparent vision in addition; these laws are considered as a new expression of confidence between the government and the investors.

    Protecting the investors and activating methods of disputes settlement are the most amendments of the capital market law.

    National alliance among all parties shall be provided to activate the social protection and to protect the low-income citizens.

    The total investments during the first quarter of the current financial year are 155 billion pounds.

    - What is your assessment of the new investment law?

    New investment law added many incentives which will contribute significantly to attract more local and foreign investments in addition, this law targets to create an investment environment which contributes to eliminate the bureaucracy and also it mechanizes many proceedings which facilitate the investment activities such as companies’ establishment, funds infusion. The new law includes many elements which attract investors such as tax deduction in the undeveloped zones, government support in delivering utilities to the new enterprises. The law reintroduced the free zones for private sector which they are tax and customs free zones and it’s considered as a main attractive element for investment and providing hard currency.

    - You have published a book about the legal interpretation of the executive regulation of the new investment law, what are the main contents of the book?

    The book is an attempt to simplify the law and convert it from a jurisprudential perspective to a practical economic perspective. The book is composed of many chapters; preliminary chapter includes the explanatory memorandum of the law, issuance articles and companies’ businesses that are stipulated in the law. Chapter one includes the general rules regarding the investment principles. Chapter two includes investment guarantees and its incentives. Chapter three includes companies’ establishment, investment regimes of the investment, technological, and free zones. Chapter four includes the competent authorities that enforce the law. Chapter five, which is the last chapter, includes the investment disputes settlement, the amicable dispute settlement means and the arbitration and mediation centre and the competent ministerial committees. The book is written in a simple and scientific way and it’s suitable for businessmen, investors and decision makers.

    - Does the law provide sufficient advantages to the investors?

    Off course, the law determines clear mechanisms to facilitate the proceedings for the investors by using the single window system which is considered as one of the most important proceedings which develops the climate of doing business in Egypt in as well as improves the working conditions of private free zones unlike the previous law. Thus, the new law is considered as an expression of confidence between the government and investors and it gives a clear and transparent vision for both of them.

    - An amendment of capital market law is submitted before the parliament. In your opinion, what are the amendments that shall be made to the law?

    No doubt that the recent amendments shall contribute in improving the capital market but I believe that investors’ protection rules and activation of disputes settlement means clearly and in a creative way shall be determined and price control and good distribution practices shall be emphasized to help in converting Egypt to an international logistic for commodity trading.

    - What about the economic reform proceedings and their repercussions from an investment perspective?

    The economic reform proceedings contributed in increasing the total investment during the first quarter of the current financial year 2017/2018 to reach 155 billion pounds however the last financial year was 101 billion pounds according to the estimation made by MPMAR and also it contributed in increasing cash reserve to reach 80% of the anticipated economic growth during the first quarter of the financial year 2017/2018.

    - What is your assessment of the Arabian stock markets’ performance generally and the EGX’s performance specifically?

    Due to the political fluctuations in which the Arab world witnesses, the capital markets indices declined during the last period; capital markets’ indices of Abu Dhabi, Saudi Arabia, Kuwait, Qatar declined while the EGX performed very well and this proves the astonishing performance of the EGX.

    - What are your expectations for the EGX’s performance during the next year?

    EGX’s trend rises but it needs promotion programs by providing a simulation of the EGX and improving its public perception for all groups of people not only for the investors because we lack the concept of economic culture and should such culture is available, we can keep up with the international economic circumstances and conditions.

    - What would you recommend to an investor in the EGX upon making an investment decision?

    The current period is good for investment and it’s better to invest during such period because Egypt moved forward towards the economic reform by applying clear economic and political reforms, developing investment climate to enhance investors’ confidence and enforcing the real method for the comprehensive social development which guarantees the rights of the low-income citizens.

    - In your opinion, what are the prominent methods for guaranteeing the enforcement of social protection programs?

    Sustainable development and the social responsibility for the public and private sectors shall be enforced. National alliance among parties, state, civil society and individuals, shall be existed to achieve the target of the social protection according to the development plan of the state which consists of comprehensive and complex policies package in all fields such as health, education and providing the basic services which targets to provide a decent life for all sectors of society.

    Atef ElSherif

    Al-Ahram Al-Ektesady

  • November 12, 2017

    Regarding the custody of 1200 of the Saudi businessmen.

    Egyptian capital market recovered its loss and there are no letters concerning freezing the bank accounts of the suspended businessmen.

    By Ibrahim El Azzab & Abd El Nasser Mansour

    The number of the Saudi senior businessmen and politicians who are held in custody reached 1200. The most prominent of these businessmen are Alwaleed Bin Talal and El Sheikh Saleh Kamel who are considered two major Arab investors in Egypt. This dilemma raises an important question, Will the investments of these investors in Egypt, be affected by the decision of the Saudi authorities to confiscate their assets? Especially that some of these companies’ shares, which are owned by these investors, were negatively affected after parts of the investigations conducted by the Saudi authorities were published by the media nationally and worldwide.

    In the beginning, Atef Yassien ElSherif, the former chairman of the Egyptian Exchange and current the managing partner of a law firm specializing in legal consulting, explains that the Egyptian government is obligated to execute final judgments that were issued by foreign governments regarding a few investors who own real, moveable or liquid assets in Egypt, the Egyptian government is also obligated to execute any decisions issued by the attorney general of any country regarding any foreign investors in Egypt .

    He adds that, the Egyptian government signed the Riyadh Arab Agreement for Judicial Cooperation , which Egypt joined in 2014 and the agreement includes Egypt, Saudi Arabia and Bahrain. This agreement was accredited by the Arab Cabinet on the 6th of April 1983 and executed on the 30th of October 1985. This agreement includes 16 countries including Egypt which joined in 2014 by decree of the President, given that article 25 of the agreement stipulates that it is necessary that all members of the agreement shall recognize and execute final judgments issued by Civil and Commercial Courts , and that includes any decree whatever its name which was issued by any recognized judicial decree or official entity in a Member State, the same applies to the capital market including stocks, bonds and investment funds. This also applies on direct investments whether it was factories, lands or real estate. Finally, this applies to liquid assets (bank/individual) owned by the person in custody.

    He also adds that informing official authorities of one of the member states in the agreement shall include an official decree to the Egyptian Exchange and Egyptian Financial Supervisory Authority urging it to stop trading stocks and inform the CBE to report any accounts owned by certain people whose accounts are to be forfeited by the banks operating in the banking market and M.C.D.R to freeze their bank accounts and their securities and also report to the Real Estate Publicity Department to prevent conveyancing their real assets and also report to GAFI to prevent issuing any resolutions in the general meetings of their own companies or the companies which they own the majority of their shares whether it’s ordinary or extraordinary general meetings.

    He explained that the member state shall report the court orders and judgments that pertain to assets forfeiture of criminals whether they are arrested or the fugitives to the Ministry of Justice of the state where such orders and judgments shall be recognized and enforced by. Then, Ministry of Justice shall report to the Attorney General who shall forfeit the assets of such criminals by notifying the abovementioned entities which are CBE, EFSA, Real Estate Publicity Department, GAFI & EGX.

    Atef ElSherif & Mostafa Talaat

    Alam Al Mal

  • July 3, 2016

    Former EGX chairman: New litigants joined canceling the transactions of Beltone's lawsuit... and the compensation value will be a surprise.

    By Mostafa Talaat

    EGX & EFSA were founded to save Investors...EFSA refers for prosecution.

    It is not necessary to offer a model of "Karafate" to apply it... Confidence and openness between the state and the citizen are required.

    The ordinary man does not care about the economy or the size of the investment...and production is the only solution to the dollar crisis.

    Lifting the sanctions of currency trading on the black market is not a solution... The inclusion of exchange companies to the system is necessary.

    Herd behavior, low awareness and some institutions stressed on the stock exchange in the British crisis.

    The economic share in the media is very weak...and the possession of a promotion method by the stock exchange is the best solutions.

    Dr. Atef ElSherif, Former EGX chairman, confirmed that EGX & EFSA were founded to save Investors not for stressing on their interests, but EFSA refers the Investors for prosecution, demanded for leniency towards the investors not because the law gave them the power of referral, to be in this way- as he described it.

    ElSherif stated to Alam Al Mal that he filed two lawsuits before the administrative court; the first is on behalf of Beltone Financial Holding Company, the other one is on his own behalf against EGX & EFSA chairmen regarding the repeated cancellations on trades of the company’s shares, also he noted that these lawsuits will be heard within days because for the first time in the world transactions are canceled for more than 45 times without evidence and he also assured that new opponents will be joined to the lawsuit and the compensation value will be surprise.

    EGX & EFSA were founded to save Investors...EFSA refers for prosecution.

    It is not necessary to offer a model of "Karafate" to apply it... Confidence and openness between the state and the citizen are required.

    The ordinary man does not care about the economy or the size of the investment...and production is the only solution to the dollar crisis.

    Lifting the sanctions of currency trading on the black market is not a solution... The inclusion of exchange companies to the system is necessary.

    Herd behavior, low awareness and some institutions stressed on the stock exchange in the British crisis.

    The economic share in the media is very weak...and the possession of a promotion method by the stock exchange is the best solutions.

    Dr. Atef ElSherif, Former EGX chairman, confirmed that EGX & EFSA were founded to save Investors not for stressing on their interests, but EFSA refers the Investors for prosecution, demanded for leniency towards the investors not because the law gave them the power of referral, to be in this way - as he described it.

    ElSherif stated to Alam Al Mal that he filed two lawsuits before the administrative court; the first is on behalf of Beltone Financial Holding Company, the other one is on his own behalf against EGX & EFSA chairmen regarding the repeated cancellations on trades of the company’s shares, also he noted that these lawsuits will be heard within days because for the first time in the world transactions are canceled for more than 45 times without evidence and he also assured that new opponents will be joined to the lawsuit and the compensation value will be surprise.

    On the other hand, ElSherif demanded an increase in the share of the economy in the media and the need for the stock exchange to have a special media tool and educational curricula shall include syllabus of stock exchange and capital market. He stressed that the trust and openness between the state and the citizen on one hand and between the state and the investor on the other hand is an important means for growth of economic development.

    To the script of the dialogue...

    First... How do you evaluate the Egyptian economic situation?

    In light of current data, economic performance is not satisfactory at the level of government performance and not at the level which represents Egypt as a major country in the region, but the presidency is only an authority which develops strategies and plans of the economic system, but the crisis remains in the implementation of those plans by the executive agencies, which suffer deceleration and lack of interest in priorities. By the way, the ordinary man or simple citizen often cares about goods and services, low inflation, price stability, lower unemployment rate and everything that touches him in his daily life and at the same time does not worry about the macro or sub-or partial of the economy or the volume of investment obtained by the state.

    What priorities do you mean? I mean each ministry must has priorities; the priority of the Ministry of Trade and Industry is operating the troubled factories and the Ministry of Investment and International Cooperation aims to attract the investor in all ways and means, but unfortunately when the investor thinks to invest in Egypt, we are so skilled in making him leave the country.

    So, do you think that ministries did not play their role well? If you just go to GAFI, you can discover the extent of suffering that the investors face when establishing their companies; some of them go to the GAFI at 5:00 or 6:00 am just to reserve a spot in the row to review the company's establishing documents, also the ratification of budgets, GMs and security inquiries waste the time. You can imagine the suffering of the investment in Egypt even though, this is the first step in the investment process or what is called "The first window", therefore most investors refuse to invest in Egypt after facing these sufferings, so we must blow up these obstacles completely.

    What solutions do you suggest in this regard? Solutions and ideas are so simple, it is supposed that this institution was found to facilitate the investment, so why the ministry does not specify a period of time for the completion of the commercial registers and the termination of all the new incorporation documents and make all these transactions automated without having to go to the GAFI on an ongoing basis and that is happened in many countries. It is not necessary to offer a model of "Karafate" to apply it in Egypt but there are some successful models and samples in countries that have achieved satisfactory economic rates such as Japan and Malaysia as it is not a required to apply the European or American system, but the most important is to fit that model with my potential, education and economic.

    Capital Market Law has not come to light yet … why? The Capital Market Law has been concerned by the former minister of Investment Dr. Ashraf Salman, but currently the capital market law has not been concerned by ministry of investment and now it’s on the table of the cabinet which has other priorities so the law will be delayed, however the new minister Dalia Khorshid has no connection to the capital market unlike Salman who is connected to the capital market and knows it very well and also has been delegated by the cabinet to supervise the capital market.

    What is your opinion about dollar crisis that plaques our country? The production is the only solution for dollar crisis; it leads to reduce the imports so the dollar would not be highly demanded and a quick movement would be made in which the ordinary citizen can feel it. Sources of dollar are known for example tourism, Suez Canal and money transfers by the Egyptians from abroad and in case any deficiency has been happened, it should be rapidly fixed but they only apply calmative solutions.

    Does the closure of exchange companies represent a solution for the crisis? Absolutely not, what happened to these companies is not the root cause for these problems and the officials made that to be unliable. Exchange companies are founded since the dollar price stability, so what is different now? The CBE, instead of closing companies, should insert these companies in the system such as brokerage companies and securities trading companies so exchange companies will have ratified records and I think Dr. Youssef Boutros Ghali, the former minister of finance, has sought to make an automated system for the exchange companies.

    What is your opinion about increasing the penalty of currency trading on the black market to be 3 years? Criminalizing currency trading on the black market is not a solution and the root cause is the lack of production and currently money transfers by the Egyptians is an important resource but it has been decreased because there is someone who purchases the dollars from them at high prices and the methods of attracting there monies inside Egypt has been failed and even the lands which the government announced that it will sell them in exchange of their dollars , the first group has not been received such lands till this moment.

    What is your opinion about the national projects? It was supposed that these projects would be founded beside the fundamental projects which lift burdens of the citizens especially opening the closed factories and finding solutions for investors’ problems to enrich principles of trust and clearance between the state and the citizen and between the state and the investor.

    What are the promising investment sectors in Egypt? Currently, education is the most promising investment sector and I was surprised when the minister of education said that there would be no private schools anymore although we need them and also health, transportation, foods and information technology sectors are required in countries such as Malaysia.

    In what extent Egypt have been affected by UK’s leaving the EU? UK did not leave officially and House of Commons will provide its opinion and it may take too long but generally investments in Egypt will not be affected whether UK leaves the EU or not but it may have an effect on the future investments in Egypt.

    But why did the EGX have a lot of impact after the referendum? Because of the herd behavior as the investor is often looking for a topic for the dialogue. In addition, the low awareness whether from the EGX governance or capital market associations or EFSA or the Investor Protection Fund or from the Media and away from all of that, some institutions which own stakes in EGX seek to pressure on the market and who traced the movement of foreign investors found that they have recorded a net buy in the time of crisis, so why did the Egyptian institution sell in that time?

    All the elements and the previous categories must change the mental image of investing in the stock market and encourage investors to save, for example the post office has issued an investment fund on the stock exchange but it did not receive enough promotion although it is a great opportunity and still to exploit the money of the workers in this sector.

    And here, what is the responsibility of the media? Not the media only but also education... The quotient of economy in media is very weak, EGX was launching a specialized economic channel in the period of Dr. Mahmoud Mohey Eldin and Dr. Maged Shawky the former presidents of EGX, and already got the license but where is this step now. Either education has not have any specialized subjects about investment or saving in the stock market, also, there is no interest in universities about the role played by the stock exchange as an important platform for financing, Faculty of Commerce Helwan University is the only university in the Republic that includes a section related to the stock exchange and the capital market. The stock market has launched a program called "step by step", which is a good idea but it needs to expand better rather than targeting certain clubs and institutions, but I still think that the best way to promote is to own a media outlet, either a newspaper or a television channel of the stock market, as well as the educational level on the stock exchange website is insufficient.

    There is somebody who advocates for the inclusion of the informal economy, can we? The informal economy reaches 87% of Egypt's total economy and it is strong economy and cannot be underestimated and to encourage it to join the economy there must be a number of temptations; at least , including but not limited to, raise tax exemptions to 20% instead of 10 or some privileges in obtaining licenses easily or accelerating the operation of small and medium enterprises, there are big countries interested in this economy, for example America, where street vendors are located in central of New York, but in a regulated and organized way.

    What is your assessment of the ministers of the economic group in particular? The economic system needs to be restructured, starting from periodic meetings between the cabinet and the ministers of the economic group and each of them cares about his competence and does not intervene in other’s competences and if this happen they should be penalized for that. Unfortunately, the government and the ministries do not sit with each other and there is no coordination. For example, when the Ministry of Supply & Internal Trading announced the offering of some of his companies on the stock exchange, although if he studied law, he will not make such a statement because the law no. 203 of 1991 prohibits offering such companies on the stock exchange, as well as statements that made by the ministers of public enterprise sector and investment are all illegal.

    What are your updates against the stock exchange regarding the cancellation of Beltone trades? We filed two suites before the administrative court, one of them in the name of Beltone Financial Holding and the second one is in my name against the EGX and EFSA chairmen regarding the repeated cancellations on trades of the company’s shares and within days the case will be heard in the court, all facts assure the strength position of the company as it is the first time in the world, the transactions of a share are canceled more than 45 times without evidence and a fault committed by the company in the increase or decrease of the share price. However, the law must be applied in a flexible manner to achieve its objective and any legal rule that has been legislated to achieve that interest. Sometimes such interest is general, such as protecting people or the capital market community or, in particular, protecting small investors. If no one is hurt, why is it applied?

    But, isn't the cancelling transactions is a kind of supervision? Article 21 of the capital market law, which Dr. Mohamed Omran based on it in the cancellation of the transactions, is existed for a long period of time in order to protect the market and legislated to be applied in certain situations and according to certain conditions, However the excess in applying such article, as it happens now, loses its meaning and who manipulates, he is worthy to be referred to the trial and those who have evidence against the company, they shall submit to the prosecution, as for the cancellation of transactions in this way is not acceptable and there will be new litigants and surprise in the value of compensation to be demanded by the company in the lawsuit.

    What about EFSA? EFSA always refers investors to prosecution, while it is preferable to reconcile and to find solutions with them, there are risks in all countries all over the world, but it should use the power patiently. EFSA and EGX were founded to save Investors not for stressing on their interests, not because the law gave them the power of referral, so they use it in this way, they have to be gentle with investors who were astonished and lost their minds after their referral to the criminal court because he earned 3 pounds…this really happened and that’s enough.

    Who can settle the disputes? There must be disputes resolution committees related to the capital market and the Capital Market law allowed doing so, as such committees shall not belong to any entity and the investor can sue the EFSA or the EGX.

    Why did the number of traders in EGX decrease? Simply because EGX becomes an expeller of investment and a mean of torturing the investor, so who sees this black image, he will not think to invest, as it is happened regarding investment entities in Egypt.

    So there is no way to revive the current situation? The market does not need to be revived and the experiment is not worth it, but it needs different mechanisms to attract the lost liquidity, which has become an effective element in the bad image of the recent proposals - Except for the proposals that included the GDRs, the transactions values should not reach a maximum of half a billion pounds in a country that includes one of the largest stock exchanges in the world, while the transactions values reached 2 billion pounds in the pre-January revolution period.

    Tell us about the period of running the EGX? My period did not last long but I succeeded in achieving about 25% increase in the main index and transactions values increased from 130 to more than 500 million pounds on the first working day, and the stock exchange did not close its doors even for one hour and did not alleviate the working hours such as the banks during the June 30 revolution.

    What is your opinion about the impact of bank savings certificates on the EGX? The stock exchange remains and will remain the cheapest means of financing, although banks issue savings certificates, but the risk factor is added to the expeller factors of investment in the EGX, unlike banks, and the certificates are tax-exempt.

    Do you think that Arab support will continue with the decrease in oil prices? Arab investments will exist where interests exist and may increase during the next period, but it is noted that all Arab oil resources and support are wasted in wars especially certain countries.

    Atef ElSherif

    Al-Ahram Al-Ektesady

  • September 12, 2015

    Former EGX chairman demands for adopting a popular government initiative to finance major enterprises.

    By Abd El Nasser Mansour

    Atef ElSherif, former EGX chairman, said that the transition to a new quality of economic and social policies is our main demand as Egyptian traders.

    He added that the formulation of a new philosophy or strategy for development explains our current capabilities as major development capabilities and the importance of starting the transformation of the Egyptian economy to self-dependent productive economy as well as adopting popular government initiative to finance the major enterprises by public subscription by which the EGX shall play a pivotal role.

    He noted that restoring the experience of Talaat Harb at the founding of Banque Misr in a modern manner, using the EGX system as well as choosing good investment sectors such as education and fishing and mining industries, etc. are the experiment that we must follow to benefit both the investor and the state at the same time.

    He said, “Relationship between the strategy and the strategists shall be provided, leaders who are affirmative and have the ability to make strategic decisions and think out of the box shall be provided”.

    He called for considering the sharp decline in gross domestic savings comparing to the GDP, raising public awareness of the importance of trading on the stock exchange and converting them to an effective investors in the national economy and creating the incentive and vital motivation for all investors to trade on the stock exchange.

    He demanded for managing relationships with the states and explained the importance of adjusting exchange rate to overcome the challenges of globalization under the opportunities, challenges and the extended coordination between CBE and economic entities. Activating EGX can play an important role in supporting the external relationships of Egypt especially at the African continental level and within Nile basin countries.

    He also asked to pay attention to the economic media to improve the public perception of the investment, good businessmen and EGX to ensure their support. no one can imagine there is no economic channel in Egypt, land of civilization, although there are good newspapers, economic magazines and unused human resources.

    He mentioned that the government shall monitor the performance of financial system bodies such as financial institutions and capital markets.

    He asked to reconsider the legislations which regulate the Egyptian capital market to create a reliable investment climate and stable tax policy to keep up with the successive developments of the international capital markets in addition to protect shareholders’ rights as well as to ensure an acceptable economic reform.

    He called for activating the real and developing role of the EGX in SMEs and also providing funds to support the enterprises that have the priority of the economic development plan, for example encouraging the role of NSB regarding this matter.

    He asserted that the mechanisms and crisis management departments shall be provided especially in the capital markets to avoid the effects of what happens in the world and also to relieve the EGX of a burden and not to bear even the consequences of any wrong policies.

    Finally, He demanded for seeking to establish specialized private stock markets in accordance with the current capital market law to support certain industries or markets.

    Atef ElSherif

    Al-Ahram Al-Ektesady

  • August 13, 2015

    Atef ElSherif: The administrative and tax crisis is still applied despite of its temporary cancellation.

    About the economic projects, Atef ElSherif, Former EGX chairman, said, “Stimulating the stock exchange depends on the good management of the stock exchange, the patronage of the government and a clear economic programme. It's not reasonable for the taxes to be kept applied on the stock exchange even though an announcement postponing it for 6 months had been issued. This inconsistency in decisions has a negative effect on the transactions, especially of the foreigners”.

    ElSherif also explained that the government didn't give the stock exchange any role as one of the finance pots in the economic convention, as all the scenes were about banks and the stock exchange had no contribution.

    ElSherif pointed out that recently, there were wrong practices witnessed by the stock exchange contributed to its decline, including the new proposals with the decline in liquidity in the market, which negatively affected the indicators. The issue is not linked to new goods, but to integrated actions contributing to support trading in the market.

    ElSherif said that the importance of developing the capital market system, whether the management of the stock exchange or the listed companies and the investment funds as most of the capital market workers do not take technical training courses that contribute to support the competencies of the employees, but it's stopped more than 7 years ago.

    He also said that the need to introduce new financial instruments such as warrants attracting a large segment of traders in the stock exchange as well as specialized stock exchanges such as commodity bourse and stock exchange for gold. These stock exchanges are found in countries much less advanced than Egypt and would attract many traders to the Egyptian market.

    ElSherif also confirmed that the stock exchange, like other state institutions, is still managed with traditional thinking. Competencies and powers should be allowed to EGX chairman to take unconventional decisions in unconventional circumstances and he also assured that the need to develop the thoughts of government employees towards the stock exchange and pump its real stimuli, which previously I referred to, as well as completing the system of the state management by forming the Council of Representatives, which contributes to the political stability of the state.

    Atef ElSherif

    Al-Ahram Al-Ektesady

  • June 28, 2015

    Asking about it before going to Egypt: Safe departure of the investor from the market.

    By Ibrahim El Azab – Abd El Nasser Mansour

    Atef ElSherif, former EGX chairman, said that the legal supremacy and sovereignty of the public joint stock company are exercised by the shareholders who own its capital and attend the general meetings to follow up the company’s affairs.

    Regarding the guarantees of exercising exit right, he said that objection and exit request may be recorded in the general meeting minutes or filing an exit request within 30 days from the date of merger resolution being published.

    He also said that the evaluation of the exit shares report must be provided whether by an agreement or a judgment as well as the undisputed amount shall be paid before completing the merger procedures in addition to the compensation, if required, and he will have a lien on the assets of the company.

    He added that the approval of two thirds of the shares represented at the meeting shall be provided unless the resolution pertains to capital increase or decrease, dissolution of the company before the deadline, changing the company’s business or merger. In such events, approval of 75% of the shares represented at the meeting shall be provided.

    He also noted that the guarantees of the grievance and litigation rights are conferred to whom own at least 5% of the company’s shares. According to such rights, they may file a request to stop ratifying the general meetings resolutions which are passed in favor of certain group of the shareholders or harm such group.

    He affirmed that any resolution which is passed in favor of certain group or harm such group may be null and void. The nullity of such resolution shall be requested only by the shareholders who recorded their objection towards such resolution in the general meeting minutes did not attend the general meeting because of a good reason. The public authority may, on behalf of the shareholders, file a nullity request if they have good reason.

    Regarding shareholders’ rights of the public joint stock company, he asserted that we shall differentiate among their rights during the stages of the company as there are rights that pertain to stage of company establishment and there are rights that pertain to the stage of after-establishment of the company and listing in the commercial registry office and finally there are rights that pertain to the stage of full establishment, subscription and listing in the commercial registry office.

    He said that the extraordinary general assembly amends the memorandum and articles of association and is responsible for capital increase or decrease, share repurchase, changing the legal status of the company, sale its enterprise or dispose it by any means, dissolution or liquidation or merger of the company.

    Regarding shareholders’ rights of the capital market, this stage starts by listing company’s shares on the stock exchanges. The laws which regulate the capital markets, regulations such as disclosure, transparency, listing, clearing and settlement rules) are the most important guarantees of investors’ rights in this stage.

    Finally, he said that the law is in the forefront of the guarantees because it empowers FRA, EGX and MCDR to regulate and supervise capital markets and also the companies in order to ensure the safety and the accuracy of such transactions and to protect the investors by establishing principles of the proper and fair treatment among the investors.