CAIRO: Egyptian steel magnate Ahmed Ezz, a top official in ousted president Hosni Mubarak’s party who is being investigated for graft, resigned as chairman of Ezz Dekheila Steel, the company said on Monday.
Ezz, who quit the party during protests that erupted on Jan. 25, has been detained since Feb. 17 pending trial on suspicion of wasting public funds.
He was charged with illegally taking control of Al-Dekheila Steel, which then supplied its parent company Ezz Steel with steel at reduced prices, causing Al-Dekheila heavy losses. A judicial source said Ezz was also charged with monopolizing Egypt’s steel market.
Ezz has said in a letter sent to media from prison that charges against him are unfounded and that a fair trial will prove his innocence.
Some analysts say Ezz’s resignation from Ezz Dekheila’s board of directors would have limited effect on the business because he was not strongly involved in day-to-day operations.
But they also noted the resignation was welcomed by investors, with shares in Ezz Steel rising 3 percent by 1226 GMT. Egypt’s benchmark index was up 1.3 percent.
"It’s probably what the market wanted to hear," said Beltone Financial analyst Omar Taha. "But in terms of operations, it doesn’t change much."
Ezz Steel, Egypt’s largest steel producer, holds a 55 percent stake in Ezz Dekheila, which said on Monday its unaudited 2010 net profit was unchanged from a year earlier at LE 724 million ($122 million).
The firm said in a brief statement to the stock exchange that its revenue rose 21 percent in the year to LE 9.86 billion.
Ezz has been replaced by Farouk Ibrahim as chairman of the board of directors of Ezz Dekheila.