French cement company sues Egypt army over takeover attempt
A French cement company has filed a lawsuit against the Egyptian army, demanding substantial financial compensation for losing out when the Egyptian military took increasing control of the construction industry.
Vicat Cement, the main shareholder in Sinai Cement since 2003, claims it unfairly lost a chunk of its shares when the Egyptian military took control of the construction industry under the pretext of “preserving Egyptian national security”
It is also arguing that Egypt is preventing the company from operating, on the grounds that its ownership of the majority stake in Sinai Cement conflicts with a law prohibiting foreign companies from owning the lands of the Sinai Peninsula.
Vicat turned to the World Bank's arbitration court after it received no help from the French government.
Vicat owned around 56 percent of Sinai Cement two years ago, before it was forced to give up a portion of its shares. It now retains around 41 percent.
According to information obtained by The New Arab’s Arabic service, the army and the intelligence services are looking to acquire large shares of Sinai Cement. The company’s founder, Hassan Ratib, is currently in jail under charges of smuggling antiquities. He is the owner of around 11 percent of the company’s shares.
Sources told The New Arab's Arabic service that the conflict over shares in the company have turned both Ratib and Vicat into targets of the Egyptian government.
Ratib was recently offered an acquittal on the smuggling charges in exchange for giving up most of his shares, according to sources, but there has been no agreement on this so far.
The army’s attempts to acquire the company’s shares began with the issuing of Defence Minister Decision No. 66 of 2018, which only allows ownership in the Sinai Peninsula to Egyptian nationals who hold no other nationality and descend from Egyptian parents.
Consequently, the French company became ineligible. The company has established an Egyptian-owned joint stock company to maintain shares in Sinai Cement.