Cairo Economic Court handed out Raya Holding chairperson Medhat Khalil and others a fine of EGP 200,000 each, with a total of EGP 110m for the charges assigned to them all to link, and obliged them to return the value of the securities subject to the violation.
The fine is considered the largest fine in the history of the Egyptian capital market, as it is the first application of the amendments to the Capital Market Law.
Khalil intends to appeal against the ruling. According to Hani Khalil, the group’s legal advisor the ruling will be appealed immediately with the group’s confidence in the validity of its legal position and stressed the abuse of Mohamed Omran, head of the Financial Regulatory Authority(FRA) of his power.
Hani Khalil alleges that the FRA filed a criminal lawsuit against the related group despite the submission of the unjustified acquisition offer imposed by the FRA, especially since all the stock purchases of the related group were carried out according to the disclosure form prepared by the Egyptian Exchange. He also argues that for the first time second-degree relatives definition include the wife’s relatives are in the same degree as the relatives of the husband.
Khalil said that Raya Holding was greatly affected by the behaviour of the FRA Chairperson due to defaming the company’s reputation, which prompted some of the group’s global partners to withdraw.
The lawsuit was filed by the FRA against Raya’s Medhat Khalil for not paying a fine. The filing states that he refused to pay an EGP 11m fine handed out after he exceeded the maximum ownership limit in Raya without making a mandatory tender offer (MTO).
Earlier, the FRA had ordered Khalil to submit an MTO for Raya or sell his stake, arguing that he and related parties – wife, sons, and others – controlled a combined 42% of the company which requires a MTO.
In April 2019, Raya Holding chairperson has bought a 26.7% stake of Raya Holding through his El Pharonia Real Estate Investment for EGP 314.76m in MTO.