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Oriental Weavers' stock tumbles on legal fears - Daily News Egypt

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Oriental Weavers' stock tumbles on legal fears

CAIRO: Carpet-maker Oriental Weavers tumbled 7.87 percent to LE 33.70 after sources at the Egyptian prosecutor s office said that the prosecutor general had requested that the Shoura Council (Upper House of Parliament) lift the immunity of its chairman to question him in a legal case. “I read and heard about the rumors but my …


CAIRO: Carpet-maker Oriental Weavers tumbled 7.87 percent to LE 33.70 after sources at the Egyptian prosecutor s office said that the prosecutor general had requested that the Shoura Council (Upper House of Parliament) lift the immunity of its chairman to question him in a legal case.

“I read and heard about the rumors but my immunity has not been lifted and there is no investigation, Mohamed Farid Khamis, chairman of Oriental Weavers, told Daily News Egypt.

Shares dropped as rumors circulated that the prosecutor wanted immunity lifted to question Khamis, a member of the Shoura Council, in a legal case.

This generates negative sentiment for the company, Karim Hosny, trader at Pharos Securities, told Reuters.

Oriental Weavers also denied the rumors in a press release published on the stock exchange website.

A source who spoke on condition of anonymity said the name of the company was mentioned along with a list of other companies involved in a legal case that has nothing to do with the rumors currently circulating.

These companies had paid unspecified administrative fees to the Ministry of Finance to import and export goods. These fees were deemed illegal by Egypt’s Constitutional Court, which meant that these companies could get their money back by taking legal action.

The legal consultants at Oriental Weavers approached a law firm to handle the case, and it is this law firm that is currently entangled in a legal case.

Sources told Daily News Egypt that the prosecutor’s office has not released a statement confirming the request to lift immunity from its chairman, but has imposed a publishing ban on the whole issue.

Egypt-based Oriental Weavers, which calls itself the world s largest maker of machine-made rugs and carpets, made a 16.7 percent increase in its 2008 first-half net profit to LE 172.3 million ($32.3 million).

Khamis told Reuters last week that profit growth for 2008 would likely ease to between 10 and 12 percent from 21 percent in 2007, as US revenue stagnates.

Al-Alam Al-Youm newspaper said in mid-August that Saudi Arabia s Fitaihi Holding had bought 5 percent of the company for LE 153 million.

Topics: FJP

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https://www.dailynewsegypt.com/2008/09/04/oriental-weavers-stock-tumbles-on-legal-fears/
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