Egypt banks under fire for alleged funds smuggling

Daily News Egypt
4 Min Read

By Nasser Youssef and Mahmoud Sheneshan

An investigative report conducted by the BBC hinted at the involvement of the Egyptian banking system in transferring funds abroad for figures of toppled Egyptian president Hosni Mubarak’s regime.

The report said that part of the funds were smuggled abroad by banks that were not subject to the supervision of the Central Bank of Egypt (CBE), such as the Arab International Bank before it joined the CBE.

The pictured investigation eluded to the role of the governor of the CBE in smuggling the funds before and after the January 25 Revolution. The report also cast doubts on the safety of an amendment to the banking law in 2003, especially regarding the jurisdiction of the president to be the only one entitled to appoint, accept resignation, and hold to account, the CBE governor.

This is not the first time that the Arab International Bank faces these accusations. Voices were raised after the revolution accusing the AIB of helping figures of the former regime to smuggle and launder money, but it is the first time that the accusations are leveled by a credible body.

The AIB denies the allegations, claiming that its statute was amended so that it can join the CBE.

Throughout last year, the CBE dismissed any relations with toppled regime officials, rejecting accusations of manipulating the foreign reserve and asserting that the case will be referred to the public prosecutor for investigations.

The CBE has not launched any investigations yet in this regard and has not asked the concerned bodies to follow it up.

Minister of the Legal Affairs, Mohamed Mahsoub, said that the weak supervision of the Egyptian banking system contributed greatly to the smuggling of billions abroad.

Businessmen received loans from banks for establishing projects which they did not carry out and they transferred these funds abroad before the revolution, Mahsoub added.

The banks claim that the loan payments are connected with the projects carried out.

An official at the AIB defended the bank saying that it is ready to appear before the investigative bodies. He called on anyone who has any evidence condemning the bank to submit it to the concerned bodies.

He added that the bank did not take part in smuggling any money in favor of the old regime figures as they did not among customers of the bank.

He threatened to take legal action against any parties seeking to undermine the confidence of the investors in the bank and to involve the bank in any illegal actions to achieve personal gains.

“There are parties that seek instability in Egypt and shaking trust of investors in markets and try to open unserious files,” the official said.

The official called on the BBC to pay attention to the money laundering operations in which British banks are involved.

Another official at the CBE urged the government officials not to be deceived by rumors that target the instability of the Egyptian banking system.

He underlined that the bank took strict measures after the revolution to regulate the process of transferring funds abroad.

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