Crimes against Egyptian Joint Stock Companies
Egypt has managed to improve its investment environment throughout promising long-term and short-term plans that in spite of COVID-19 pandemic, resulted in the incorporation of more than 1,600 companies with a collective capital that reached 7.9 billion Egyptian pounds (approx. $ 502544524.90 currently) only in June, 2020.
In spite of Public Funds’ (“PF”) crimes being originally legislated to secure the money and properties of the State. However, Joint-Stock Companies (“JS”) are also covered by the said protection against certain crimes that can be made by employees as well as Board members in Egypt (the “Affiliates”), regardless of its incorporation by private persons, shall be subjected to some of those PF crimes.
The first crime is misappropriation, which is the act of an Affilate misusing the funds or objects in their possession and appears as their owner. The second crime is embezzlement, which is the act of stealing any funds or objects owned by the company. The third crime is facilitation of embezzlement, which is the act of facilitating non-Affiliates to steal the company’s funds or objects.
These crimes are deemed as felonies and are punishable to imprisonment by law that can reach up to five years, in addition to job termination, restitution and a fine valued by the misappropriated or embezzled value.
The idea of subjecting PF crimes on JS companies’ Affiliates is very simple: PF crimes are legislated to secure the state’s property, which is owned generally by the population, and the most unique characteristic of a JS company is that its capital is divided into shares that are transferable. The repercussion of this transferability is that any member of the society can, at any time, own any of its shares. Thus, these companies’ properties need to be secured by more forcible sanctions than other private companies, as the population’s rights are affected by any threat to the company’s properties, which is easier if committed by, or with the help of, any of its Affiliates.
In spite of the general support of this idea, another group criticized it, as they believe that practically the importance of securing JS companies appears in public JS companies having its shares transferable in real life, family and medium companies shall not be subjected to PF crimes as they are usually closed JS companies, these companies’ shares are usually owned by family members or relatives, not transferable, and in fact the shareholder of such shares is always known and chosen. All these facts, from this group’s point of view contradicts with the idea of subjecting JS companies to PF crimes.
Lexology Getting The Deal Through – Financial Services Compliance 2023 – Egypt
- Corporate Crimes