Beltone Financial Holding filed a declaration to leave the dispute and waive the proceedings against the Egyptian Financial Supervisory Authority (EFSA) yesterday in the Administrative Court, which is reserved for the report of the commissioners.
Beltone’s lawyer, Othman Mawafy, said Beltone and its two companies have reached a final reconciliation with the EFSA. They affirmed dropping the case in court yesterday therefore ending the dispute. Beltone is resuming its normal business following the reconciliation.
On the other hand, a legal source close to the EFSA, said that the EFSA had not yet reconciled with Beltone, specifying four main axes governing the reconciliation process.
The first is that the reconciliation will be in the criminal aspect and will not be related to the administrative decisions. The second is that the reconciliation is not mandatory for EFSA. The third is that the decision-maker of the endowment can at any time suspend the decision’s effect once the violation has been removed. The fourth is that since the board of directors of the EFSA is the authority which has taken the decision to suspend Beltone’s IPOs and fine Beltone Securities, it will thus have the right to cancel the decisions, not the chairperson or vice presidents.
The source expected that the reconciliation procedures will be concluded in the criminal section within a period of one to 10 days. The action committee will determine the value of the reconciliation, expecting that it will not be great, especially after the acquisition of Orascom Investment Holding of 30% of Sarwa Capital, which means a reduction in the amount of damage on the capital market.
The source did not specify the value of the reconciliation, as the law did not determine a ceiling for it, but it may be one of the multiples of the value of damage or profit or avoidance of losses in accordance with the law.
Furthermore, the source denied the existence of a relationship between the value of the reconciliation in the criminal case and the compensation of some or all of the complainants, where it is necessary to get the affected customers to file lawsuits and determine the value of compensation if there are reasons.
On the other hand, the report of the state commissioners issued yesterday, recommended rejecting the appeals of Beltone on both of the EFSA’s decisions 170 and 171.
The EFSA has suspended Beltone for six months after it was charged with violating the rules of the private placement of Sarwa Capital, in partnership with its sister company Beltone Securities, which contained six violations, including unsolicited orders; the use of part of customers’ balances and creditors to fund subscriptions to other customers; inflating subscription applications beyond the financial customer capacity, and the bias of the seller’s party to place the highest price for non-price orders.