Beltone affirms compliance with Capital Markets Law, denies irregularities in Sarwa Capital’s IPO

Beltone Financial Holding finds the Financial Regulatory Authority’s (FRA) decisions to suspend the group’s investment banking arm—banning it from carrying out any market activities for a six-month period—as surprising, and is yet to be informed of their stipulations and reasons for their issuance.

The company’s announcement was published in a press statement, late on Saturday.

On Thursday, Egypt’s financial regulator suspended the IPO unit of Egypt’s Beltone Financial Holdings, on the back of alleged irregularities during Sarwa Capital’s IPO.

Beltone Investment Banking acted as sole global coordinator and bookrunner, for Sarwa Capital’s IPO, which began trading on the Egyptian stock exchange last month.

Sarwa Capital’s public offering was oversubscribed around 30.1 times, recording a strong demand of EGP 6.5bn, equivalent to 887,409,725 shares,compared with 29,517,073 shares offered.

Shares in Beltone, which is controlled by Egyptian billionaire Naguib Sawiris through his company Orascom Investment Holding, fell 10% in early trading on Sunday.

Additionally, on Wednesday, OIH requested approval from the FRA, to present a voluntary offer to buy a non-controlling stake of 216.03m or 144.02m shares minimum of Sarwa Capital, at EGP 7.36 ($0.4121) each.

The group also reaffirmed its commitment and that of its subsidiary companies to operate in compliance with the Capital Markets Law No 95 and its executive regulations, according to the statement.

Moreover, the statement confirmed that Beltone Securities Brokerage continues to conduct normal business operations and that all of the group’s companies continue to operate in line with the aforementioned FRA decisions.

The statement stressed that the group will take all necessary proceedings to obtain further details and stipulations of said decision based upon its findings.

“The group will pursue the appropriate legal actions to safeguard its interests and those of its shareholders and clients.” the statement concluded.