Periodic raids are carried out by the Egyptian authorities on business people without a clear or understandable reason. Some of them are suddenly arrested, their money seized, their companies confiscated, and then they are suddenly released. The raids on business people have affected opponents, and those close to the regime. Even business people supporting the Sisi regime have been arrested more than once, and their money confiscated. Even after their innocence, the ball is played again. The business and financial community woke up today to the news of the arrest of a well-known businessman, Safwan Thabet, owner of Juhayna Dairy Company. His money had been seized. Juhayna Food Industries, the largest producer of bottled milk and juice in Egypt, stated that it does not know anything about the content of the investigations conducted with Thabet. Reuters reported that after the seizure of Safwan Thabet’s money and his arrest, the Egyptian Stock Exchange stopped dealing in Juhayna’s shares in the market, following the company’s shares’ collapse by 7.3 per cent. The owner of Juhayna is not the only businessman who is suddenly mysteriously arrested. In fact, this is not the first time that he has been arrested and his money confiscated.
Corruption or blackmail?
In 2015, Safwan Thabet’s liquid, movable, and real estate funds, his personal deposits in banks, and his shares in Juhayna Dairy Company were seized. In November 2015, security forces raided the house of Salah Diab, founder of the Beko Investment Group, in western Cairo, and arrested him, along with his son, and seized their money.
Government decisions at the time included seizing the money of 17 business people, among them Mahmoud el-Gammal, the father of Gamal Mubarak’s wife, which the government said was in the context of corruption cases. The strange thing is that the businessmen are close to the regime and were among the al-Sisi’s regime’s most prominent supporters. The strangest is that they were released after a while, and the money was returned to them. It was said that closing these businessmen’s cases was due to pressure from external partners and the government’s fear of economic deterioration, especially since their arrest had a significant effect on the stock market and investment at that time.
The most prominent businessmen who were arrested and had their money confiscated in 2015 before they were released and the ban on their money was lifted is Salah Diab and Safwan Thabet, with whom the ball is now returned. Diab himself was re-arrested last September, and the government said that the matter was related to financial corruption cases and tax evasion. Still, he was re-released amid ambiguity surrounding the cases in which he is accused. Diab chairs the board of directors of the Pico Group specialising in the agricultural field, and his family controls 70 per cent of the agencies of American companies in Egypt. The Diab family acquires 43 agencies for American companies, the most important of which is Halliburton Petroleum, in addition to huge real estate investments, most notably the New Giza project.
The incomprehensible successive raids on the men of the matter raise questions about the purpose, especially since they have negative repercussions on the economy, the stock exchange, and the investor community each time. Economists have warned of the dangers of these measures on Egypt’s investment situation, considering that they create an exorbitant atmosphere for investors, whether Egyptian or foreign, and reveal a hidden conflict between business people and the regime. They saw that the government’s decision to seize several business people’s funds raised investors and other business people’s fears that similar decisions will affect them.
Mamdouh al-Wali, an economist, made it clear that the government’s decision to seize money and shops was considered a violation of the amended constitution in 2014. He explained that Article 33 guarantees all types of protection for those who continue, and Articles 35 and 40 of the constitution provide for the protection of private funds and the prohibition of confiscating them for legal or other motives. He added that the Investment Law of 1997 stipulates that it is not permissible by administrative means to impose receivership, or seize funds belonging to companies or individuals.
Some other experts believe that the arrest of businesspeople might be due to the state’s need for a few billion in liquid funds in light of the deterioration of the government economy and the budget deficit, stressing that the matter is just piracy. Since the military coup in 2013, the al-Sisi regime has confiscated dozens of companies, projects, hospitals, and private schools, claiming that they are owned by individuals affiliated with the Muslim Brotherhood. According to multiple reports, the regime seized the funds of hundreds of detained business people. It formed committees to inventory and manage their properties, which led to the plundering of these companies’ funds and projects.