The Army Dairy Company: The secret behind the arrest of Safwat Thabet and his son

In 2014, in a meeting in the presence of General Abdel Fattah Al-Sisi, the chairman of the board of directors of the Juhayna dairy industry Safwan Thabet donated EGP 50 million to Tahya Misr Fund (Long Live Egypt).

Observers say that donating to that fund is a way for businessmen to prove their loyalty to the regime. The regime used to see donors as “patriotic” businessmen who support the country’s economy. This classification makes businessmen safe from harassment, persecution, and arrest. But after one year, Safwan Thabet’s money was seized, claiming his support for the Muslim Brotherhood (MB), before the government in 2016 took control of up to 7.2 per cent of his company’s shares. In 2017, the authorities included him on the terrorist list among the leaders of the MB.

At the end of 2020, the security forces arrested him. His son was also arrested in early 2021, under the allegations of “supporting and financing the organisation.” This was the story of Thabet, the largest owner of Juhayna, which reformulated Egypt’s dairy and juice industry, with 200 products which were distributed in Egypt and exported to several African, Arab, and European countries.

Sources revealed that the security pursuit of Safwan Thabet is not limited to the security aspect. The military’s economic ambition to control the dairy market was the main reason the authorities changed their perception of Safwan Thabet from a “patriotic” businessman to a terrorist. There were no talks in any of the 30 years that Thabet worked in Egypt that indicated that he was in any way related to the MB. The only relationship that linked Safwan to the MB was the relationship of kinship. Thabit’s mother is Khaleda Hassan Al-Hudhaibi, the daughter of the second guide of the Muslim MB and the sister of Mamoun Al-Hudhaibi, the sixth guide of the MB.

One of the top businessmen in Egypt affirmed that “Safwan is a businessman, and his family relations were never part of the story, and the security knows him and follows him, and his work is all under the authorities’ eye.” He added, “Safwan is like us. When the state asks for something, he makes it and he remained that way before and after the January revolution, and before and after (former president Muhammad) Morsi.” Another businessman affirmed that “Thabet is far from the MB’s organisation and its social and political project in general.”

According to Thabet’s story, in a book on his experience in industrialisation published in 2017, when he decided to return to Egypt from Saudi Arabia where he worked for many years following his graduation in the Mechanics Department at Helwan University, he visited the Minister of Interior, Hassan Al-Alfi. Safwan said that he told Al-Alfi that he wanted to return to work and invest in Egypt, his maternal grandfather was Hassan Al-Hudhaibi, and his maternal uncle was Maamoun Al-Hudhaibi. His uncle was the Armed Forces Major General Ahmed Thabet, who assumed the minister of supply’s duty during the October War. According to Thabet’s account published in the series “Men of the Beautiful Time,” Al-Alfi said: “The sons of Al-Hudhaibi live and work freely in Egypt because they have nothing to do with politics.”

During the 1980s and 1990s, until the January 2011 revolution, Thabet’s business flourished, and former President Hosni Mubarak visited his factory more than once. Direct relations linked the successful businessman with the ministers of economy, finance, supply, and others. He previously held the presidency of the Chamber of Food Industries in 2013 for four years.

With Al-Sisi’s arrival to power, Thabet was invited to participate in one of the first meetings he held with people in business in 2014. After this meeting, Thabet announced his donation to the Long Live Egypt Fund for EGP 50 million. Although his and his family’s money was placed under custody in 2015, Thabet maintained a good working relationship with the state. In the same year, and over the next three years, Juhayna was honoured by the state among the top 100 Egyptian companies.

Safwan Thabet participated in honouring the ministers of the Economic Community. In that honour, Thabet spoke as a businessman aware of the importance of preserving the regime’s satisfaction. He ensured that the company’s work he heads goes in line with the country’s goals for the 2030 Agenda. In 2018, Saif Thabet signed a decision to donate EGP 15 million to the Long Live Egypt Fund to support the campaign to eliminate Hepatitis C. After this contribution the company received a shield of honour. Saif (his son) received it personally from the Financial Affairs Authority of the Armed Forces.

Weeks before Thabet was arrested, a senior figure involved in one of the state’s new projects for dairy products made multiple visits to Juhayna’s factories and he showed this visitor how to run the plant and update equipment and operating systems. After one of these visits, the source revealed that a sovereign body (which he did not disclose) asked Thabet to consider merging part of Juhayna’s factories with the factory that that entity intends to establish as real support for food industries. The source indicates that the constant of this speech is “just a chat, not a request.” But it seemed to be a serious request. That body considered a constant lack of response, ignoring or rejecting its request.

An Egyptian journalist familiar with the Egyptian army’s economic activities suggested that this character was the director-general of the National Service Projects Organisation of the Armed Forces, Major General Mostafa Amin.

The visits coincided with Al-Sisi reiterating his continuous directives from mid-May until the beginning of last September by the prime minister, minister of agriculture, and some other officials, to establish an integrated system of dairy collection centres nationwide. This system will include 200 advanced milk collection centres across the governorates of the Republic. Al-Sisi’s directives were also linked with the director-general of the National Service Projects Organisation of the Armed Forces, Major General Mostafa Amin, a man who plays a vital role in the economic activity of the military.

Al-Sisi repeated these statements on December 1, hours before Thabet was arrested. He directed the government, during those statements, to bear the cost of those centres obtaining the international certificate for the approval of standard specifications for production quality, at a rate of EGP 50,000 for each centre. The mysterious figure who visited Juhayna’s factory also coincided with a remarkable improvement in the company’s profits. Juhayna has weathered violent crises with the rise in energy prices in 2014 and the EGP’s devaluation in 2016.

Another source from the governmental food industries community pointed out that the beginning of “the anger of Ali Safwan Thabet came before that. Thabet rejected a proposal submitted to him by one of the concerned ministers to buy the state-owned (Qaha) and (Edfina) companies, which are suffering from major economic pitfalls.” The source said, “Safwan’s lack of interest in the idea was not only due to his lack of interest in the project. The rejection was also due to the “large and exaggerated financial compensation that the company would have to offer in exchange for the two companies. “

According to a source familiar with the developments of the case, after Thabet was arrested, what was required of him and his sons is to give up the assets of the Pharaoh Company for Limited Investments that the family owns. The source confirmed that the request was not related to payment. “It is the assets that are needed, not the funds.” A third political source revealed that there were “proposals” made by “mediators” to seek a fitting end to this crisis. “The continuation of this situation was not in the interest of anyone because it is not logical that the state honoured businessmen who finance terrorism. Safwan and his son were honoured more than once. This crisis is an embarrassment for the state and its institutions before it was a businessman crisis.”

However, Thabit and his son’s crisis are that all the legal and judicial procedures of conserving and managing funds did not fulfill the regime’s desire to access what it wanted from these people’s money. A judicial source familiar with the work of the Brotherhood’s Funds Conservation Committee confirmed that the assets of the targeted companies are still far from the regime’s hands.

The political source says he expects to exercise security pressure on the feet of the business to reach the maximum of what they can pay to fund Long live Egypt. Not millions or even billions, but corporate assets this time.

An Egyptian businessman working in the dairy sector said that Safwan had become a formidable competitor in the Egyptian and African dairy market. The military knows that it is difficult to bypass this easily. The easiest is to get its hands on his company. During the past years, the Egyptian army has monopolised many economic areas in the country. It quickly removed all competitors and controlled many areas of the economy. Observers say the army is still aspiring to expand its economic empire to other regions.