Employees and shareholders of Egypt’s National Development Bank (NBD) recently brought a case to the Administrative Court, calling for the nullification of a 2007 deal to sell the bank. They accuse the government of selling the company for well below its market value, in violation of mergers and acquisitions law.
The Abu Dhabi Islamic Bank and its shareholders offered to buy the NBD for EGP 11bn, according to its value in 2007, when the bank’s stock share value totaled EGP 38.5bn.
Although the government previously rejected the decision made by Investment Minister Muhammad Mahya al-Din to sell off the bank’s public finance shares, many of the bank’s private shareholders sold off their stock after the deal was completed.
Prosecutors claimed there are a number of misconceptions regarding the deal, as those shares that were sold belonged to Bank companies, union workers and individual shareholders. They added that the government agreed to the deal in violation of the Finance Market Law and Purchase Offer Rules, which stipulate that mergers and acquisitions must be based on the average market value of the company over a six-month period.