Process of CG in Egypt
Mohamed Omran
Vice Chairman
Cairo & Alexandria Stock Exchanges
December, 13th 2006
Process of CG in Egypt
The First ROSC Exercise (2001)
Issuing New Listing &Disclosure Rules (2002)
The Second ROSC Exercise (2003)
Establishing The Institute of Directors (2004)
Issuing the first Corporate Governance Code (2005)
Process of CG in Egypt
The First ROSC Exercise (2001)
The First step was in 2001 when the World
Bank published its first assessment of
corporate governance system in Egypt
Process of CG in Egypt
The First ROSC Exercise
 The
assessment highlighted a number of areas where
Egypt’s corporate governance system needs strengthening
in major six headings, Including:
 Disclosure
of ownership and control structures
 Disclosure of financial and non-financial information
 Training for regulators and the private sector
 Role and effectiveness of shareholders’ meetings
 Practices of boards of directors
 Professional conduct of auditors.
Issuing New Listing & Disclosure Rules

August 2002 : The implementation of new Listing,
Delisting and Disclosure rules.

Focusing on the concept of transparency through a set
of obligations concerning the disclosure of significant
material information.
Listing, Delisting & Disclosure Rules
(cont’d)
Such obligations include but not limited to, that
companies should notify CASE with :




The board of directors (BOD) composition and its key
officers resumes and ensure that no conflict of interest
exist with any of the BOD members.
Business contracts between the company and its
directors, managers, shareholders and related parties.
Organizational structure of companies.
Detailed capital structure including percentages of
shareholders ownerships.
Listing, Delisting & Disclosure Rules
(cont’d)





All transactions between the issuer and any of its
shareholders.
The existence of an audit committee, the names of its
members and their duties.
The General Assembly Meetings.
The internal procedures and regulations undertaken by
the issuer, which do not permit any insider trading, i.e.
to buy or sell securities of the company based on
insider information.
The annual and quarter financial statements.
Listing, Delisting & Disclosure Rules
(cont’d)
CASE Rules concerning Financial Statements Dissemination




The issuer shall review and prepare the financial statements according
to the Egyptian Generally Accepted Accounting Principles which follow
the International Accounting Standards.
Publish a “Board Report” that provides an overview about the
company activities during the year.
Deliver to CASE and the CMA a copy of the annual financial
statements whenever approved by the company's BOD with the
Auditors Report by a maximum of 90 days from each FY end.
Deliver a copy of the quarterly financial statements whenever approved
by the company's BOD with the Auditors Report by a maximum of 45
days from the end of each quarter.
Listing, Delisting & Disclosure Rules
(cont’d)
CASE Rules concerning Financial Statements Dissemination




Publish the issuer’s annual & semi-annual financial reports, the related
footnotes, the Auditor's Reports and the CMA comments in two daily
widely circulated newspapers, one of which, must be in Arabic.
Ensure all interior procedures that guarantee that there is no information
leakage, specifically designated to financial analysts, financial
institutions or other parties, before disclosing them to the public.
Immediately notify the Exchange with any material events occurred,
such as new bonds issuance, material changes in shareholders’
structure, purchase of treasury stocks, etc.
Directors and senior managers of the issuer must inform the Exchange
of their trading on the company’s shares, before the execution process.
1,400
600
1,200
500
1,000
400
800
300
600
200
400
Number of listed companies
2006
2005
2004
2003
2002
2001
2000
0
1999
-
1998
100
1997
200
Market capitalization
LE Billion
Number of Companies
Impact of CG on Number of Listed Companies
vs. Market Cap (1997- Nov 2006)
The Second ROSC Exercise
 The
World Bank second assessment was Published in 2003.
 It
highlighted a number of major reforms, mostly
incorporated in new stock exchange listing rules, as well as,
identifying several key next steps, including:
 Building
a Center for Directors that can help develop
a Code of Corporate Governance.
 Focused enforcement of the new listing rules and
disclosure provisions.
 Implementation of legislative reform to bring the
policy framework into greater compliance with the
OECD Principles.
Establishing the Egyptian Institute of
Directors

A decree issued by the Minister of Foreign Trade in
2003.

Two boards structure: (i) Board of trustees; and
(ii) Executive Board.
Process of CG in Egypt

Release of Egypt's Code of Corporate Governance in
2005.

Release of the Corporate Governance Manual for StateOwned Companies in 2006.
Currently
Reviewing the current Listing, Delisting
& Disclosure Rules