Last Updated: Sat May 07, 2011 23:04 pm (KSA) 20:04 pm (GMT)

Court returns iconic Omar Effendi chain to public ownership

The subsidiary of Omar Effendi chain store in Alexandria. (File photo)
The subsidiary of Omar Effendi chain store in Alexandria. (File photo)

An Egyptian court has restored to public ownership the iconic department store chain Omar Effendi, sold in 2006 to a Saudi investor. Critics blasted the deal as too cheap, the state news agency MENA reported on Saturday.

The well-known chain has branches in every big town across Egypt. It was founded more than 150 years ago and nationalized in 1957. It was sold to Saudi firm Anwal for 589.5 million Egyptian pounds ($98 million) in 2006 as part of a privatization plan.

Because of public familiarity with the brand, the sale by then-President Hosni Mubarak’s government drew greater scrutiny than many other sell-offs. The opposition press had long accused the Mubarak government of selling it too cheaply.

The court’s cancellation of the Omar Effendi deal followed other rulings to scrap state land sales. In those rulings, issued both before and after Mr. Mubarak was ousted on February 11, 2011, the state was found to have sold land directly rather than at auction. This led to sales below market prices.

MENA said the “investment disputes department” of the administrative court ordered the Omar Effendi deal to be scrapped. It said the case was raised by Hamdy Fakhrany, an engineer who had also successfully challenged state land deals.

A state commission had earlier advised that the department store contract be cancelled because of “several legal violations,” MENA said, without giving further details.

The Omar Effendi ruling can be appealed.

The Saudi firm had bought a 90 percent stake. The investment minister at the time of the deal, Mahmoud Mohieldin, said the state would keep 10 percent of the shares “to make sure that the investor fulfils all the clauses of the contract.”

At the time, Anwal reportedly promised to spend 180 million pounds ($29.9 million) on developing the business and retaining properties deemed of architectural value, including one on Abdel Aziz Street in Cairo and one in central Alexandria.

An Egyptian firm, Arabiyya Lel Estithmaraat, had planned to buy 85 percent of Omar Effendi for 320 million pounds ($53.1 million) from the Saudi company but scrapped the idea in December 2010 saying results of due diligence were unsatisfactory.

Omar Effendi was founded in 1856 under the name Orosdi Back and long dominated the retail sector. It changed hands and acquired its current name in the 1920s.

(Mustapha Ajbaili of Al Arabiya can be reached at:

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