The court has also annulled various disputed licences, prompting steel producer ezzsteel, formerly Al Ezz Steel Rebars SAE, to issue a business update after the verdict.
The Egyptian Court convicted former head of the Industrial Development Authority Amr Assal and ezzsteel founder and former chairman Ahmed Ezz. They were sentenced to 10 years in prison and fined jointly E£660m (£70m). The Court also sentenced the former Minister of Industry and Trade Rachid Mohamed Rachid to 15 years in prison and fined him E£1.414bn (£150m).
The Court also annulled all disputed licenses that were granted to various Egyptian steel producers in 2008 under the same conditions. These include the two expansion licenses issued to ezzsteel's subsidiaries, Ezz Rolling Mills and Ezz Flat Steel, as well as the licenses issued to the Egyptian Sponge Iron & Steel Company - Beshay, the Suez Steel Company and the Tiba Steel Company. The Court rejected civil claims that were filed by various individuals and entities claiming damages against the defendants.
Mr Ezz said that he is innocent from any criminal wrongdoing and he will appeal the ruling.
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Regarding the annulment of the licenses under the above judgment, ezzsteel said that the licenses do not impact its current operating facilities. However, the annulment of the licenses is expected to have a direct and indirect impact on the future growth plans of the company and its subsidiaries, relating to the construction of Direct Reduced Iron (DRI) modules and additional meltshop facilities in Sokhna-Suez, the licenses for which were granted in 2008.
As a consequence, the company is studying all available legal options and taking the necessary steps to counter the impact of the judgment. It is reviewing investments not yet under construction to determine which projects should be suspended given the prevailing economic conditions at the time. The company is also taking steps to ensure the completion of the DRI project at Ezz Rolling Mills. The total investment for this project amounts to more than E£2.6bn out of which E£1.7bn has already been disbursed. Ezzsteel said that it believes that the completion of the DRI project that is under construction is in the interest of all stakeholders.
In 2010, the company produced 3.4 million tonnes of long products, typically used in construction, and 1.5 million tonnes of flat products, typically used in consumer and industrial goods.
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