Briefs

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Best corporate practices

HOW TO BEST protect shareholders' rights was the focus of discussions at a recent one-day seminar sponsored by the International Finance Corporation (IFC) and the Egyptian Institute of Directors. Some 60 participants from the private sector took part in the debate on voting rights, related party transactions and insider trading. Topics also included the role of shareholders and the best practices of corporate governance.

"What is often overlooked is how the quality of shareholder protection affects the depth of capital markets," says Ashraf Gamaleddin, chief executive officer of the Egyptian Institute of Directors. Gamaleddin added that shareholders are willing to invest when laws and corporate action are upheld. "If corporate governance is to be properly implemented, shareholders must play an active role in making sure that their investments are carefully considered and protected," he noted.

Participants also discussed the difficulty of applying laws protecting shareholder rights. "The problem is that shareholders do not know their rights," stated one participant. "What is worse, is that they don't want to practice them."

A comparison was made between international and local practices with regards to corporate governance. "Shareholders have to be treated fairly and with equal regard and respect," asserted Jesper Kjaer, general manager of IFC's technical assistance facility, the Private Enterprise Partnership for the Middle East and North Africa. "This precept conforms to the corporate governance requirement that directors act in the best interests of all shareholders, and not just the shareholder that may have nominated and elected them to the board."

The IFC is engaged in several corporate governance advisory initiatives in Egypt, Jordan, Lebanon, Pakistan, and the United Arab Emirates.

Turkish presence

INTENSE negotiations are underway between Minister of Trade and Industry Rachid Mohamed Rachid and his Turkish counterpart Kurshaad Kuzman on a Free Trade Agreement (FTA) between Egypt and Turkey. After ratifification of the much-anticipated agreement by the parliaments of both countries, its implementation is expected to take place within weeks.

Kuzman, who arrived in Cairo on Tuesday, is heading a delegation of 100 company heads to explore investment opportunities in Egypt, and the two ministers have chaired several seminars aimed at spearheading cooperation between the two sides.

A memorandum of understanding which stipulates the creation of a Turkish Industrial Zone in Egypt will also be signed during Kuzman's four-day visit. The Turkish business delegation is also scheduled to visit a number of Turkish factories in Egypt, and inaugurate a new industrial complex in the city of Borg El-Arab tommorow.

Egyptian exports to Turkey increased by 14 per cent between January and April, 2006, in comparison to the same period in 2005. Egyptian imports from Turkey plunged during the same period, dropping to $184 million from the $214 million recorded for the same period in 2005.