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Steel tycoon responds to accusations of monopoly - Daily News Egypt

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Steel tycoon responds to accusations of monopoly

CAIRO: Steel tycoon Ahmed Ezz has been in the media spotlight – or more accurately, under the microscope – this past week as he confronted rumors surrounding his wealth, accusations of monopolizing the local steel market, and what many see as his conflicting positions as both businessman and influential politician. Ezz spoke to several media …

CAIRO: Steel tycoon Ahmed Ezz has been in the media spotlight – or more accurately, under the microscope – this past week as he confronted rumors surrounding his wealth, accusations of monopolizing the local steel market, and what many see as his conflicting positions as both businessman and influential politician.

Ezz spoke to several media outlets over the past few days, finally answering a barrage of questions in interviews with Dream TV’s nightly talk show “Al-Ashera Masaan as well as Al-Masry Al-Youm and Rose Al-Youssef daily newspapers.

More than slashing the rumors, the interviews showed just how politically savvy the controversial billionaire/MP really is. Many called into the talk show to say how little they believed of what he said, asking more questions about his professional career and the massive profits his companies have recorded over the past years.

Chairman and Managing Director of Al Ezz Industries – which, through its four steel facilities, holds more than 60 percent of the market share – Ezz is also the chairman of the planning and budget committee at the People’s Assembly as a member of the ruling National Democratic Party (NDP).

Ezz explained his company’s exorbitant profit margins by saying that in 2006, the company consolidated the steel operations of Ezz Group under Ezz Steel’s “more unified structure under which the company is now operating. This meant that the financial performance of the businesses were consolidated, which accounts for the increase in profits and sales figures.

For years, rumors and accusations have surrounded Ezz, his business practices and his influential role in the country’s political arena; all of which have intensified over the past few weeks as the PA discussed proposed amendments to the anti-monopoly law.

On June 15, the PA passed the final version of the law with few concrete amendments, a disappointment to both the public and those who proposed the changes, including the Egyptian Competition Authority (ECA).

The fine for monopolistic business practices was capped at LE 300 million, not a percentage of the company’s sales – either 10 or 15 percent – as recommended by the ECA.

Another vital aspect of the proposed amendments was the introduction of the leniency clause – exonerating the first to report a cartel from all charges – which was rejected altogether by the PA. Days later – upon request from Ezz – this clause was amended to exonerate those who report a cartel from 50 percent of the fines.

He came under fire by the public and the press, who accused him of swaying the vote on the anti-monopoly law in the PA to pass what many saw as amendments that would most benefit his steel empire.

However, in his interview with “Al-Ashera Masaan, Ezz denied having participated in any of the sessions discussing the draft law. Likewise, in his Al-Masry Al-Youm interview, Ezz responded to those who accused him of using his political pull to pressure Trade Minister Rachid Mohamed Rachid by saying that he couldn’t be happier with the anti-monopoly law.

“Now we have a law to follow, said Ezz, “after being attacked as an institution for years. We invited the ministry to come and inspect our operations, he told Rose Al-Youssef.

Defending his business operations, Ezz told “Al-Ashera Masaan that people in Egypt often confuse a company that holds a large share of the market with one that actually employs monopolistic business practices.

He then went on to list what constitutes monopolistic business practice, adding that he is as eager as the public to have the ongoing investigation into the steel market come to an end and show that none of the subsidiaries of his steel empire are guilty of such practices.

“I am sure that my companies don’t practice any kind of monopolization, he told Al-Masry Al-Youm.

“Our share of the market has decreased from 72 percent to around 56 percent because about 10 new companies have entered the field adding two tons [of steel] to the local market.

He also said that there is no monopoly in Egypt and that the problem lies in the fact that we don’t care to know the details of an issue, instead basing their judgments on their general impression of it.

In his interview with “Al-Ashera Masaan, he even jokingly apologized to presenter Mona El-Shazli for boring her with the details.

To allegations that real estate prices were exacerbated by skyrocketing steel prices set by his company, Ezz said the price of steel constitute only 15 percent of the 200 percent increase in prices of real estate around Cairo.

Also in his interview with Al-Masry Al-Youm, Ezz ruled out allegations that people’s lives are worse today than ever before, and even rebuffed the idea of a shrinking middle class.

“People’s lives are better and saying that people can’t feel the economic development is inaccurate and untrue, he said giving, examples of workers in the construction and tourism sectors.

“The fees of a blacksmith have increased by 120 or 130 percent compared to previous years. Also, the incomes of workers in the tourism and management in the government increased a lot especially after the salaries increase.

Ezz was referring to the 30 percent increase in the wages of public sector employees announced in early May, which was followed two days later by increased prices of high-octane fuel, natural gas prices for energy-intensive industries, and cigarettes, as well as fees of vehicle licensing.

On his role in the ruling NDP, Ezz said that most of the policies aren’t his responsibility and he is only responsible for organizing consensus among the party’s MPs during discussion inside the PA.

He then tackled the sensitive issue of separating his roles as politician and businessman, which many pose a conflict of interest. “We lack the procedures that separate public work and private interests, he said, adding that society must decide to make politics a full time job or to specify rules that everyone agrees upon.

Concerning the opposition, Ezz said that they seem to oppose everything in the agenda just for the sake of opposing. “I have been in parliament for nine years and every year the opposition rejects the general budget, he said.

“They rejected the traffic law, child law and [criminalizing] female genital mutilation, he told Rose Al-Youssef. “The difference between us and the opposition is that they aren’t responsible for taking decisions and making laws.

“Opposition parties missed a lot of chances, they don’t present alternative programs then the press interferes to fill the void, he continued.

“They need to exert more effort on the organizational level and change their discourse to comply with their programs, he added.

The Muslim Brotherhood is banned, he said, as long as they don’t separate between state and religion. “They are welcome as a political party that doesn’t use religion as a tool. Do we want a civilian state which respect the constitution or a one-man state? he asked.

When asked about his political ambitions, he said that his current position is the highest of his aspirations.

Meanwhile, he refused to answer questions about whether the NDP takes advantage of the Brotherhood’s existence. He also chose not to comment on why he sued three newspapers.

Topics: Investment

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