NBE May Incur EGP 400 Mln Loss On Loan To National Gas

The National Bank of Egypt (NBE) may incur a loss of EGP 400 million, which is the value of loans offered to the National Gas Company, owned by Alaa Mubarak’s father-in-law Magdy Rasekh, with no collateral after the Company received a concession to deliver natural gas to Sharkia residents, sources said.

NBE is in talks with the Egyptian General Petroleum Corporation (EGPC) to settle the bad debts owed by the National Gas Company. EGPC cancelled the concession contract with the Company after 2011’s revolution, because it did not meet it liabilities and offered the natural gas at exaggerated prices. Afterwards, the National Gas Company told NBE to receive its due from the EGPC.

The international arbitration court issued a verdict stating that the National Gas Company shall be compensated by EGP 254 million, in addition to accrued interest of EGP 65 million. However, Essam Sharaf’s Cabinet did not execute the verdict, which made the company resort to the international arbitration court again.

There are many lawsuits raised by both parties, including one raised in the economic court. An expert was assigned to examine the company accounts in NBE and it now awaits the verdict of the economic court in order to settle the bad debts.

The National Gas Company’s customers filed a lawsuit demanding the cancellation of the agreement signed between the Egyptian General Petroleum Corporation and Magdy Rasekh in 1999 as the Company was said to commit grave financial violations which result in waste of public money. The company was accused of not delivering natural gas for the 60,000 people it contracted with, despite receiving more than EGP one billion subsidies from the state, besides loans from two banks.