Cairo crackdown continues

17 January 2003
The authorities have arrested a former managing director of Banque du Caire, Mohamed Abol-Fath, on charges of allegedly securing£E 1,500 million ($324 million) in unguaranteed loan facilities for four local businessmen. The arrest follows an investigation into some£E 12,000 million ($2,600 million) in credit advanced by the bank, which the prosecutor alleges did not have sufficient guarantees. Abol-Fath was arrested after returning to his Cairo home having spent three months on the run. Three of the businessmen implicated in the case have been detained and a fourth has so far eluded authorities.

The arrests are the latest results of a crackdown on corruption in the business community. In late October, former head of the Misr Exterior Bank, Abdallah Tayel, was arrested on charges of embezzling up to £E 1,500 million ($324 million). In late August, a junior agriculture minister Yussef Abdul Rahman, was arrested with five others on suspicion of transferring public money to banks in France and Switzerland.

The Cairo daily Al-Ahram reported in October that 35 business people in all are being investigated over loans totalling £E 37,000 million ($8,000 million). They include a number of figures who have left the country - a leading healthcare investor, a retail investor involved in a failed venture with a large European supermarket chain and a prominent female banker. These high-profile cases come as Central Bank of Egypt governor Mahmoud Abul-Eyoun has been urging banks, wherever possible, to reach amicable settlements with problem debtors (MEED 4:10:02).

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