15 - 21 March 2001
Issue No.525
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Al-Ahram Weekly On-line 15 - 21 March 2001 Issue No.525 |
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The view from within:
Unfounded claims
Kaha Company for Preserved Foods is one of 25 companies that have been sold to anchor investors since the privatisation programme was launched in 1993. Like other acquisitions by anchor investors, Kaha's sale was closely monitored by the Central Auditing Agency (CAA) in all of its stages. This supervision, it seems, was not enough for several parliamentarians who are trying to bring Kaha's privatisation package under heavy scrutiny.
Mukhtar Khattab
As CAA documents show, all the charges levelled concerning the sale of Kaha are entirely unfounded. All the procedures followed in selling the company are 100 per cent legal and the privatisation was by no means riddled with financial irregularities.
Kaha was sold to the 'Ouf Group which was one of five potential buyers that bid for it. 'Ouf was awarded the deal because it submitted the highest bidding price along with the fact that it submitted a comprehensive plan to upgrade Kaha's performance.
'Ouf Group offered to buy 90 per cent of Kaha's shares for LE144 million. Of this figure, LE35.4 million was settled in the form of down payment while a letter of guarantee was submitted by the group from the National Bank of Egypt for LE75 million. The remainder was scheduled to be paid in instalments over a five-year period which begins following an 18-month grace period. The sale of Kaha was also made under the stipulation that the buyer cannot dispose of the land assets owned by the company or terminate the contracts of its current employees.
Contrary to all charges, the privatisation of Kaha is really a success story. In 1997, Kaha was suffering from losses estimated at LE3.9 million. In two years, its performance was turned around and Kaha realised profits of LE2.8 million. And its foodstuffs exports increased from $1.1 million in 1997 to $1.2 million in 2000.
Minister of Public Enterprise Mukhtar Khattab addressing the parliamentary fact-finding committee investigating Kaha's privatisation
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