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70% of Egypt's holding companies to be subordinated to GAIFZ: source

Monday 06 August 2018 05:12 PM

Khalid El-Nashar
Khalid El-Nashar

By Ahmed Aly
Ministry of Investment approved a proposal amending the executive statute of decree No. 122 specifying whether the Holding companies are affiliated to Financial Supervisory Authority or to General Authority for Investment & Free Zones.
" Holding companies' investments in non-financial businesses shall be the criterion for determining whether the companies are liable  to monitoring of  FSA or GAIFZ," informed sources told Al-Mal newspaper.
For a holding company to remain under control of FSA, it must have  50% non-financial business, according to the proposed amendment. Otherwise, it shall be monitored by GAIFZ.
Subordination of holding companies to GAIFZ entails minutes of their respective boards and general assemblies as well as reports and documents must be accredited by the authority concerned with investment in the country, whereas subsidiaries that have financial non-banking activities shall remain under supervision of FSA.
" GAIFZ's approval aims at re-adjusting the standing of  holding companies liable to FSA's monitoring, helping companies having financial non-banking activities as their core business to receive bigger attention," said deputy of FSA Khalid El-Nashar.
In view of the proposed amendment, it is expected that 70% of Egypt's holding companies will be subordinated to GAIFZ, according to an insider.
Roya Holding Company has filed an application for transferring subordination to GAIFZ, the source added.
Roya Holding Co., established in 2007 and has EGP2bn working capital,  owns 13 entities operating in development, real estate investments.