News / Middle East

Egypt Tries to Lure Back Exiled Businessmen

Egyptian businessman Hussein Salem is seen in this file photoEgyptian businessman Hussein Salem is seen in this file photo
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Egyptian businessman Hussein Salem is seen in this file photo
Egyptian businessman Hussein Salem is seen in this file photo
Reuters
Egypt's government on Wednesday allowed convicted businessmen who fled the country since a popular uprising to negotiate an end to corruption charges from abroad, an attempt to lure them home to help revive a stricken economy.

Numerous wealthy businessmen have left Egypt since President Hosni Mubarak was overthrown in 2011 to avoid being jailed for corrupt dealings during the veteran leader's three decades in power.

With them went large sums of money that the government now needs desperately to shore up an economy shattered by two years of political turmoil and social unrest.

Several figures from the political and business elite with close ties to the Mubarak family have been tried and convicted in absentia of making private gain from the sale of public property or graft-tainted state contracts.

Among them were Hussein Salem, who was convicted in absentia in 2011 to seven years in jail and fined more than $4 billion for money laundering and profiteering.

The government said on Wednesday it had amended a law to offer arbitration via an intermediary in Egypt to investors targeted by criminal proceedings. The law had previously required the investor to attend arbitration in Egypt.

"It means that those with final court verdicts issued against them and have fled abroad can go through reconciliation and return the money... without having to stand in court or be put in jail," said Achraf Chazly, a corporate lawyer.

"This is driven by a desperate need for money... They want to encourage these people to return and re-invigorate the economy," he said.

A stand-off between President Mohamed Mursi's allies in the Muslim Brotherhood and their secular and liberal opponents has scotched hopes that a drought in investment will end soon.

The local currency has tumbled 8 percent against the dollar this year as Egypt's international reserves fell to $13.6 billion, less than the $15 billion needed to cover three months' worth of imports.

The reserves had stood at $36 billion on the eve of the uprising against Mubarak.

Cairo-based political analyst Elijah Zarwan said the government's attempt to entice back exiled businessmen was "growing out of perceived economic necessity, given the parlous state of the country's finances, and also the perceived political necessity - a fear that wealthy businessmen who are close to the old regime might foment problems at home."

Hassan Malek, chairman of the Egypt Business Development Association and a senior informal adviser to Mursi, told Reuters on Sunday he had been involved in efforts to persuade wealthy Egyptians to return and invest in the country, though he said court cases should be solved first.

Under the amendment agreed on Wednesday, reconciliation would lead to the cancellation of jail sentences and unlock the investors' frozen assets.

It added a "clause stipulating that in the case of a court verdict issued in absentia convicting [someone], it is possible to take measures to re-examine the case."

This would be at "the request of, and in the presence of, a special defender of the investor.'' The result of reconciliation would be "cancellation of the order to arrest and jail him, and ending the ban on dispensing and managing their assets, and dropping the criminal case for the investor.''

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