Egypt's financial regulator has suspended a joint venture deal between Egyptian investment bank EFG-Hermes and Qatar's Q-Invest, approved by shareholders on June 2, the state news agency said on Wednesday.
"The Authority approved the (shareholder) assembly in form but refused it in terms of content, procedures and decisions," the head of the Egyptian Financial Supervisory Authority (EFSA) Ashraf El-Sharkawy was quoted as saying to the state news agency MENA.
EFSA has rejected decisions made at EFG's annual meeting last month because the firm did not clarify various points regarding the deal including the fate of minority rights after it is completed, MENA cited Sharkawy as saying.
EFG must provide the required information and re-convene the shareholder meeting so that procedures for the deal can be completed, MENA cited Sharkawy as saying.
The EFSA was not immediately available to comment. EFG said earlier this month that the tie-up between the bank and QInvest was legally binding and could only be reversed through legal action.
EFG and QInvest sealed an agreement in May to form a joint-venture, in which state-backed QInvest would hold 60 percent.
Economic turmoil since a popular uprising has left EFG, the Middle East's biggest home-grown investment bank, lacking the means to expand across the region. The deal with energy-rich Qatar would give it more resources for its expansion plans.
But after the QInvest deal was announced, a group of Egyptian and Gulf Arab investors - Planet IB - made a buy-out approach for EFG that the bank's management rebuffed.
The Planet consortium said it was prepared to pay a minimum of 13.50 Egyptian pounds ($2.23) per share for EFG, which would value it at $1.1bn at least.
EFG's shares closed 0.8 percent lower on Wednesday. The main index closed down 1.5 percent.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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