As Cairo took over one of Egypt’s leading businessmen


Safwan Thabet has long had a reputation as one of Egypt’s most successful businesses, fueling his small family business in the country’s preeminent milk producer despite the Arab state shaken by social and political unrest in the last decade.

But now a huge cloud of uncertainty hangs over Juhayna Food Industries as the 75-year-old who founded and chaired the group languishes in Cairo’s famous Torah prison after being arrested in December on charges of funding and being a member of a terrorist organization.

The listed company in Cairo, which counts global fund managers among its investors, hoped that Seif el-Din Thabet, Safwan’s son and executive director, would establish the ship. But in February, the incumbent was arrested and charged with the same offenses, leaving the group’s leadership in limbo.

The company’s directors have already explained to banks, investors and customers what is happening in the business, which is 51% of the Thabet family, while Juhayna’s 4,000 employees are worried about the future.

For analysts, the saga embodies the unpredictability that the private sector faces in Egypt, where the regime of President Abdel Fattah al-Sisi has used the accusation of terrorism to target activists, academics, journalists and businessmen since the hunt for the Muslim Brotherhood in a 2013 coup.

At the same time, Sisi, a former army chief, has broadened the military’s footprint across the economy, pushing the private sector as companies find themselves struggling with the country’s most powerful institution. status.

Victims of repression?

“For portfolio investors, it suggests uncertainty across the board. Juhayna is a fantastic stock, everyone likes the stock. It’s a well-run society, a consumer game in a market of 100m people – it’s all gone for that, so something similar happens, ”said François Conradie, chief political economist at NKC African Economics, a research firm that does part of Oxford Economics.

“It casts doubt on the attractiveness of the Egyptian stock market – it doesn’t matter if you go to Egypt as an eco-investor and try to implement something.”

Friends of the Thabet family believe the father and son are victims of a crackdown that initially targeted members and supporters of the Islamist movement – which briefly took power in elections after the popular uprising in 2011 – but since then. it has become a broad campaign against all forms of criticism or dissent.

They acknowledge that Safwan Thabet’s father and grandfather were former members of the Muslim Brotherhood, but insist that the businessman “has zero ties” with the group and “zero interests in any political activity”. Thabets have not even been tested. The Egyptian government did not respond to requests for comment.

An Egyptian soldier and policeman are standing guard at a polling station

Egyptian President Abdel Fattah al-Sisi’s regime has used the accusation of terrorism to target companies since the 2013 coup © Khaled Desouki / AFP / Getty

“In theory, the company can survive”

Two friends of the family told the Financial Times that days before Seif was arrested security agents had planned to confront his father’s fate, unless he “stood firm throughout society”. Seif responded that he was not free to sign on behalf of family or other investors and 48 hours later he was behind bars, they say.

They believe “negotiations” are taking place between the security agencies and the detained Thabets – the implication is that the state is seeking to expropriate the business in exchange for its release.

“In theory, the company can survive. But if the government decides that this society should not operate, they have all the tools to prevent it, ”said a family friend, speaking from outside the country.“ It has to be some sort of compromise or business. What kind of treatment it is, it’s about the types of insiders. ”


After Sisi took power, his government appointed the Muslim Brotherhood a terrorist organization and confiscated the assets of hundreds of companies that were allegedly linked to the movement. Non-governmental organizations, hospitals and schools associated with the group were also closed. Tens of thousands of supporters and members of the fraternity have been imprisoned.

Stock price line (Egyptian pounds) showing Juhayna’s troubles

“If you drive a Juhayna car, you will be put in prison”

Safwan Thabet’s troubles began in 2015, when his personal belongings were frozen due to his alleged links with the Confraternity. But it continued as Juhayna’s chair.

Three months earlier, he had sealed a joint venture with Arla Foods, Scandinavia’s largest dairy producer, and at the time his estate was frozen, Aberdeen Asset Management, one of the largest fund managers in the UK. Together, it increased its stake in the company to 5%.

A juice and milk production line at a Juhayna factory on the outskirts of Cairo

Production line at a Juhayna factory on the outskirts of Cairo © Mohamed Abd El Ghany / Reuters

Seif took over as general manager in 2016 and was named vice president. The two Thabets were on the boards of trade associations, including the Federation of Egyptian Industries and the Chamber of the Food Industry.

Despite the freezing of assets more than five years earlier, Safwan’s arrest has still shocked those close to him. “It doesn’t make sense for the government and the intelligence to have someone who allegedly leads and finances a terrorist group and leaves him alone for the last six years to do business, meet the president, meet high-level officials [and] invest in the village, ”said a family friend.

After his arrest, police arrested Juhayna’s trucks, revoked vehicle licenses and threatened drivers telling them, “If you drive a Juhayna car, you will be put in jail,” people close to the Thabets said.

Seif el-Din Thabet in his office

Seif el-Din Thabet in his office at a Juhayna factory on the outskirts of Cairo © Mohamed Abd El Ghany / Reuters

“These people don’t want to give up control.”

Juhayna’s market capitalization, which reached 13 billion pounds ($ 828 million) in 2019, has fallen by $ 330 million – a fall of 60 percent. The Egyptian stock market, which underperformed against its emerging companies, lost about 30 percent of its value in the same period.

Some foreign investors have sold their stock. Aberdeen Standard Investments, since it was renamed after a merger with Standard Life, no longer cares about Juhayna, while Arla Foods said it decided last year to “reduce our partnership” with the Egyptian company. ” due to difficult market conditions ”. However, the Norwegian oil fund still held up 4 per cent at the end of last year.

An international fund manager said Egypt was a “market with significant growth opportunities and exceptionally well-managed companies”. But they added that it was “one where governance concerns have increased materially in recent years and where declining liquidity in the stock market has made investing in a prospect more materially risky.”

Another banker said there was a lot of hope in Egypt after the government launched painful economic reforms in 2016 to secure an $ 12 billion IMF loan. But now, “there is a lot of disappointment from investors.”

“At the end of the day, these people.” [the regime] they do not want to relinquish control, so they are not content with creating conditions where the private sector can thrive, ”he added.

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