(Adds background, quotes, context)
CAIRO Oct 3 Egyptian billionaire Naguib
Sawiris' OTMT said on Monday failure to resolve a
dispute with the financial regulator had hit business and
stymied growth, and the holding company would call a board
meeting to discuss how to proceed.
The dispute emerged six months ago and centres on breaches
the Egyptian Financial Supervisory Authority (EFSA) says were
involved in the 2011 demerger of Orascom Telecom Holding, which
resulted in OTMT's current shareholding structure.
OTMT said the dispute had scuppered efforts by its
subsidiary Beltone Financial to acquire local
investment bank CI Capital - a deal that was central to its
"The major shareholder will ask the company's board of
directors to convene at the earliest possibility to discuss how
the company will continue its business given its current
inability to expand and perform its core business normally,"
OTMT said in a statement on the stock exchange website.
OTMT said the dispute would have a "very bad effect" on the
company, its shareholders and subsidiaries as the company had
"stopped performing its core business in a normal manner".
There was no immediate comment from EFSA.
Egypt's Commercial International Bank (CIB) said
in June it had dropped plans to sell its CI Capital subsidiary
to Beltone after failing to win regulatory approval.
CIB had signed a deal in February, agreeing to sell the unit
to Beltone for 924 million Egyptian pounds ($104 million).
Sawiris said at the time he planned to merge CI Capital with
Beltone, which OTMT bought last year for 650 million pounds, to
create one of Egypt's largest investment firms.
Once combined, Sawiris had hoped CI Capital and Beltone
would offer an alternative to competitor EFG-Hermes.
But the deal hit a series of delays.
The acquisition faced an early challenge in February when a
unit of state-owned National Bank of Egypt made a counter-offer.
It withdrew after failing to reach an agreement with CIB.
Sawiris said in March the deal was still awaiting security
clearance and that the hold-up was the latest move by
authorities to prevent him from controlling a large financial
Sawiris had previously tried to acquire EFG-Hermes, one of
the region's largest investment banks, through his New Egypt
Investment Fund, but the bid was unsuccessful.
OTMT has holdings in media, technology and cable businesses
but had sought to move further into the financial services.
It reported a first-half net loss of 3.635 million
(Reporting by Ola Noureldin, writing by Lin Noueihed; Editing
by Mark Trevelyan)