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Delisting for Cairo Investment & Real Estate Development is final: Company chairman - Daily News Egypt

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Delisting for Cairo Investment & Real Estate Development is final: Company chairman

Egyptian Exchange official says “18% of company shareholders filed a complaint against delisting; we have not delisted a single company during 2014”


The decision to delist the Cairo Investment and Real Estate Development is final, said company chairman Hassan Al-Kalla. He added that the exchange “does not fund growth” and is “merely an authority that collects fees and fines”.

The company’s Extraordinary General Assembly has taken the final decision to delist the company’s shares from the Egyptian Exchange due the market’s listing rules and executive procedures.

El-Kalla said: “The Egyptian Exchange management applies a policy that forces companies to flee. Its goal is to increase fees and fines and it sucks the blood out of companies.”

According to a source with the Egyptian Exchange who requested to remain anonymous, 18% of the company shareholders filed a complaint against the delisting decision as well as an official complaint with the exchange, which is currently under study.

However, El-Kalla said that the Extraordinary General Assembly approved the delisting by an 86% majority. Only 14% refused the decision out of a desire to benefit from the stock trade. According to Capital Market Law 95/1992, General Assembly resolutions become valid through the consent of a 75% majority, which is exactly what took place.

“The delisting will be finalised within a few days and for those who objected, we will allow them to buy their shares according to a value that will be agreed upon later,” El-Kall said.

He added: “The Egyptian Exchange has not witnessed a single case of delisting since the start of 2014, while three new companies have been listed and more than 20 cases of capital increases,” adding that the total number of listed companies has reached 239.

The source stated: “The year 2013 witnessed the delisting of four companies, including two companies that optionally delisted while the remaining two cases were mandatory. B Tech and Olympic Group delisted due to acquisition procedures that occurred as well as Mokhtar Ibrahim and Specialized Contracting Industrial Company, which only had 14 shareholders and did not undergo any transactions.”

El-Kalla said: “The company was listed on the Exchange in order to take advantage of the tax breaks which later were cancelled and followed by unjustified increases for fees paid by the company to the Exchange of up to EGP 500,000 annually. This is what led us to consider delisting.”

“Investing in the stock market is no longer feasible and tax exemptions are only enjoyed by individual speculators or companies listed in exchange for tax-exempt deposits at banks,” he added.

The average yield on money in Egyptian banks ranges between 7.5-8%. The funds are not subject to taxes and any attempts to impose such a tax may spark popular protests.

Stock Exchange President Mohamed Omran said in a press release Monday that “we are filled with enthusiasm to continue to work and achieve greater accomplishments in the coming months,” explaining that the Egyptian Exchange was recently granted the prize for most innovative and developed stock exchange by Africa Investor.

El-Kalla responded by saying: “This is not true in light of the decrease both in the number of companies listed and clients over the past few years.”

Millions of Egyptians put their money in the bank as a secure investment container while the number of active Egyptian Exchange clients number less than 100,000 out of a total of two million investors with codes that allow them to invest in the stock market.

Omran said that “increased liquidity levels have enabled us to provide funding of more than EGP 10bn for Egyptian companies during recent months to help them to grow, expand and create more jobs”.

Naeem Holding President Ayman Hamed said that the Egyptian Exchange no longer has any incentives for companies to remain listed nor for new companies to list, especially in light of the current financial burdens in place that include obliging companies to publish their financial statements in newspapers as well as the fines that follow for some companies.

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https://dailyfeed.dailynewsegypt.com/2014/09/29/delisting-cairo-investment-real-estate-development-final-company-chairman/
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