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FRA amends listing and delisting rules in order to achieve better protection for minority shareholders - Wednesday 15/1/2020
  •  Dr. Omran: The Board of Directors approves an amendment to listing and delisting rules aimed at further reforms to minority shareholders protection
  • Dr. Omran: FRA’s BOD decision aims to continue the progress of Egypt’s ranking in the next “Doing Business Report” issued by the World Bank.
  • Dr. Mohammed Omran – FRA’s  Chairman revealed that at its last meeting , FRA’s BOD approved  an amendment to listing and delisting rules on the Egyptian Stock Exchange in order to achieve better protection for minority shareholders.

FRA’s Chairman said that the amendment aims to make further reforms, which will be reflected positively on improving Egypt’s ranking in the protecting minority investors indicators in Doing Business Report issued by the World Bank Group. He emphasized that a new article was added to listing and delisting rules stating that the company's board members, insiders, founders, main shareholders, company’s directors and the groups associated with them shall disclose all the essential information and data related to any conflict of interest with the company. In addition, those mentioned above shall not vote if it comes to a decision that shall be taken by the Board of Directors.

Dr.  Omran also added that the Board’s decision aims to increase the scope of disclosure and transparency and increase the efficiency of the regulatory framework for corporate governance and protection of minority shareholders. He noted that a new item was added to Article (40) of listing and delisting rules. The added item indicates the data which must be included in the BOD report which is prepared to be presented to the company’s General Assembly. In accordance with - the added item -  the report shall  include the transactions  in which a member of the company’s board of directors, insiders, founders , main shareholders, company’s  managers and groups associated with them may perform and include conflict of interest , as well as other essential information and data that may include conflict of interest.

It is worth noting that the World Bank (WB) Group's Doing Business 2020 report shows that for the fourth year in a row Egypt has made significant progress in the protecting minority investors’ indicators and has advanced 15 places. Egypt is ranked 57 among 190 countries. This is the highest ranking that Egypt obtains among all indicators that fall into the World Bank evaluation due to the decisions issued by the Authority's Board of Directors with the aim of strengthening protection of the rights of minority shareholders.

 According to the Doing Business Report, Egypt's rank on the “protecting rights of minority shareholders” resulted in topping four important sub-indicators among the MENA region. In “shareholder equity”, the MENA region received only 3.2, while Egypt was awarded the top result. The report pointed out that Egypt scored six out of the seven scores in the sub-index of "scope of ownership and control", while the assessment of the MENA region was 3.6. Egypt also received 6 out of 7 on the “corporate transparency” sub-index, while the MENA region scored 3.5, in addition to scoring 8 out of 10 on “disclosure” sub-index, while MENA scored 6.4 in total. It is worth mentioning that all these results were achieved due to decisions issued by FRA.