* Analyst sees link between ruling and share transfer deal
* OCI CEO banned from travel in tax evasion probe
* Egypt bourse slips to two-month low on travel ban news
(Adds OCI statement on tax claim)
By Asma Alsharif
CAIRO, March 4 Egypt has set limits on the
amount of shares local companies can transfer into
internationally-traded global depository receipts after a
controversial deal involving one of the country's biggest firms.
Egypt's financial watchdog made the ruling while a dispute
rages over a share offer that is likely to lead to Orascom
Construction Industries (OCI) leaving the Egyptian
stock market against the government's wishes.
On Sunday Egypt's public prosecutor barred the chief
executive of the company and his father from leaving the country
as part of an investigation into suspected tax evasion.
"There are new regulations that were set in place by the
authority to impose a limit to the (number) of local shares that
can be changed into GDR certificates," an official from the
Egyptian Financial Supervisory Authority (EFSA) told Reuters on
The amount transferred into GDRs, which foreign investors
often use to invest in companies based in emerging markets, must
not exceed a third of the company's capital, the official said,
Under the ruling, which came into force on Sunday, firms
must also obtain approval from an extraordinary shareholders'
meeting before they can make the transaction.
"This is in order to prevent a (future) replication of the
case of OCI ... so no one can make any acquisitions or tender
offers on GDRs except through the local market and through EFSA
so that it can have control over any transaction," said Mona
Elshazly, an equities analyst at Pharos Securities.
Dutch-listed parent company OCI NV, a fertiliser
and construction firm, announced a deal in January under which
holders of OCI's GDRs were offered shares in OCI NV, while
holders of the firm's Egypt-listed ordinary shares got the
option of cash or OCI NV shares.
If enough shareholders of the Egyptian-listed company
accepted either of the two options, this would lead to its
departure form the local bourse.
OCI CEO Nassef Sawiris and his father Onsi were barred from
leaving the country and placed on an arrivals watch list on
Sunday as part of an investigation into alleged tax evasion
related to the 2007 sale of an OCI subsidiary to France's
Lafarge, state media reported.
Sources close to the Sawiris family said the chief executive
and his father were out of the country. Under the order, they
would be detained if they returned.
State news agency MENA said the investigation was into
charges they evaded about 14 billion Egyptian pounds ($2.1
billion) of taxes from the sale.
OCI said in a statement that it had received a demand from
tax authorities for 4.7 billion pounds, which it was appealing
against, but had not received any notification about additional
tax demands or about the travel bans.
Egypt's bourse fell to a two-month low on news of the travel
ban, which traders said struck a fresh blow to investor
confidence in the country.
OCI, which is seeking to improve its ability to fund global
expansion with international capital, obtained board approval
for its acquisition in February but EFSA delayed its completion
after requesting more information.
In a separate development on Monday, Egypt's Palm Hills
Developments Company said OCI signed a 400 million
Egyptian pound deal to provide it with construction work.
(Additional reporting by Alexander Dziadosz and Ehab
Farouk; Editing by David Stamp and Ruth Pitchford)