Supreme Administrative Court ruled the nullification of the privatisation of the Nile Cotton Ginning Company on Sunday.
Egyptian Centre for Economic and Social Rights (ECESR) lawyer and former presidential candidate, Khaled Ali, tweeted that the verdict was issued; fellow ECESR lawyer Malek Adly confirmed the news.
The verdict cancelled the decision of the then state-owned company’s stakeholders at their meeting in 1997 to sell 50% of its shares on the bourse; it also means the rejection of the objection filed by the government against the first-degree Administrative Court verdict ruling the annulment.
“The hardest challenge regarding Nile Cotton Ginning company case was that it was sold through the bourse,” Adly said. He explained that most companies that were privatized under ousted President Hosni Mubarak’s government were sold directly to an investor, thus, the lawsuits were filed against the government and the investor; in the Nile Cotton Ginning company case, it was filed by Ali against the government and the company’s stakeholders for their decision to sell the shares in the bourse. Adly said that the reasons behind the verdict are yet to be known, but expected them to be published shortly.
A press statement issued by ECESR read: “The governmental committee that was responsible for valuation of the company has no authority, because it does not have legal basis in the 1971 constitution or in state-owned business sector law.”
The statement explained that Article 26B in the state-owned business sector law , which legalizes such a selling process, was added by a prime minister in 2006, nine years after the selling process, making it illegal by the time it happened.
ECESR lawyer, Hend Al-Adawy, who is a specialist in privatization cases, said: “The company was nationalized by a presidential decree in 1963, thus, the stakeholders’ decision to sell it through the bourse is illegal; Egyptian law prohibits the return of nationalized companies to private ownership.”
Sunday’s verdict is the second verdict by the Supreme Administrative Court this week, ruling the annulment of privatizing a government-owned-company, the first being the Tanta Flax and Oil company verdict on Saturday.
The Administrative Judiciary issued 11 verdicts ruling the annulment of privatizing state-owned-companies since the toppling of Mubarak’s regime on 11 February 2011.