Appeal of The Invalidity of Tanta Flax Contract, Claiming To Return It to Public Funds

Appeal of The Invalidity of Tanta Flax Contract, Claiming To Return It to Public Funds

The Egyptian Center for Economic and Social Rights and   Wael Hamdi Alsaid  law house  today filed the complaint  34 248 / 65jy on behalf of workers of Tanta Flax and Hamdi elFakharany  claiming  the invalidity of the selling contract of Tanta flax Company to the Saudi investor Abdulilah alKahky.

The complaint stated that the company’s shares were  5,910,000 , the holding company for chemical industries owned 3,352,870 shares , the National Investment Bank, represented by the minister of finance as chairman of the board owns 2,557,130 shares.

All shares were sold  in full with the amount of EGP 83 million , under the following terms:

Advance payment : EGP 33,200,0000 representing 40% of the total. This amount has been paid by four checks (copies attached). The selling contract is only valid after checked have been cashed.

The remaining EGP 498 million plus the deferral revenue are payable in 3 installments,

The selling price has been decided by the financial position of the company on 30/6/2004. The price was calculated according to the book value reduced by annual depreciation rates. The pricing did not abide with the rules set forth in the law of auctions and tenders and the law of the public business sector.

The appeal said that the company has nine plants (thick wood – thin wood – linen – thin string –  thick string – oil products – home furniture  – urea – conter wood). All nine plants were operating at full capacity in selling time having  2000 workers. Today more than 1500 workers were laid off and only 2 plants are running  : thin wood high  and linen).

In conclusion, the appeal requested  to stop the implementation of the decision to sell Tanta Flax and Oil with the consequent effects such as the invalidity of the selling contract between representatives of  public funds and  the buyer . Both parties should return to the state prior to contract. All company assets and property have to be recovered free of  all mortgages , debt that the buyer may have made . All workers must return to their positions prior to selling and to be paid all rights from contract  date to the date of execution of the sentence. The buyer will be held liable for all debts and commitments which may have been arranged during the duration of the contract .

The Egyptian Center for Economic and Social Rights said ,” We won the case of Omar Effendi, in which the court decided the invalidity of the selling contract  . The case was filed by Hamdi elFakharany , the defense  team was composed of  of Wael Hamdi elSaid law house  and lawyers of the Egyptian Center for Economic and Social Rights. Apparently, ECESR has received dozens of requests from workers to recover  public sector companies that were sold in violation of the  law. ECESR defense team is working on the  documents and preparing appeal  suits .

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