Investigation by: Hossam Al-Wakeel
Editorial Supervision by: Rasha Qandeel
“Whether they know how to manage or not doesn’t matter… The important thing is whether they can control the companies and the money. We had an excellent annual growth rate, but since the asset seizure, business volume has shrunk, and there have been attempts to force some key department managers to resign. All I’m trying to do now is maintain the minimum operational capacity and production lines until we can reclaim our assets.” — (A.H.), Egyptian businessman
“Within a year of the asset seizure, our branches in Cairo and another governorate were closed. The company still exists on paper, but in reality, it’s no longer operational. I was first imprisoned in 2014, then the company was confiscated in 2015. Since no one from the company could join the board with the seizure committee, an employee from the Tourism Holding Company was appointed alongside others to manage the company. After three years, I was released from prison, but the company is still under seizure. They even refused to inform me about the financial status of the company or how its assets were handled, or what happened to the contents of the closed offices.” — (A.A.), owner of a tourism company in Egypt
Among the hundreds of companies announced for seizure by the Egyptian government after the ousting of President Mohamed Morsi on June 30, 2013, this investigation uncovers the stories of companies that weave a singular narrative… A recurring pattern of mismanagement, which some company owners insist on describing as “deliberate corruption,” persisted for nearly ten years under the administration of asset seizure committees. This was before the Egyptian Parliament decided earlier this year to establish a new body under the Ministry of Finance to encompass all previous asset seizure committees and similar administrations that have been created since the mid-20th century. The new body now holds all the powers to “manage or dispose of” the recovered and seized assets.
In this investigation, we trace the performance of the previous asset seizure committees in Egypt and the new entity—both public and covert—to assess the governance of the laws and behaviors that govern them all. We also reveal the nature of the work of these bodies and scrutinize the extent of corruption in their performance, if any.
For the past ten years, there has been no disclosure of the total assets seized, nor has any accountability been provided to Parliament or any oversight body regarding the total value of these assets or the financial status of these companies when the seizure order was issued and until now. Despite reports in 2018 by newspapers owned by United Media Services—a company affiliated with the Egyptian intelligence agency—stating that the total seized assets and liquid funds amounted to 60 billion Egyptian pounds, and further reports in 2020 about the seizure of assets from other companies and businessmen, including Samir Tahsin Abdel Halim Afifi, whose wealth alone was estimated at 3 billion Egyptian pounds, there is no official report documenting these figures or confirming others.
Over the decades, Egypt has witnessed the establishment of several bodies and committees dedicated to seizing and managing properties, said to be in line with state policies as dictated by the circumstances of those times. This trajectory began with the establishment of the Agricultural Reform Fund in 1952, which was declared to aim at achieving a fairer distribution of agricultural land following the revolution. In 1956, the General Administration for Recovered Assets was established within the General Authority for Government Services, ostensibly responsible for managing assets recovered from individuals involved in financial crimes.
In a subsequent development, the Central Administration for Agricultural Reform Resources and Compensation emerged in 1971, purportedly to manage and compensate for lands confiscated under agricultural reform laws. Then came the Guardian Liquidation Authority in 1974, purportedly tasked with liquidating and managing properties placed under guardianship following the revolution.
In recent years, specifically in 2018, the Committee for the Seizure, Management, and Disposal of Funds of Terrorist Groups was established, supposedly as part of the state’s declared efforts to combat terrorism and control the funding sources of extremist groups. Finally, in 2024, the Asset Recovery and Seizure Management Authority was announced, which purportedly aims to unify and organize state efforts in managing seized or recovered assets, in line with current policies.
Successive government bodies and judicial committees have been established under official laws from the July 1952 Revolution until early 2024, with the common goal of seizing and confiscating the assets and properties of political opponents of successive ruling regimes for about 72 years. Despite updates to the laws governing these bodies, for the first time, the Egyptian Parliament decided to merge all these entities into one body named the “Asset Recovery and Seizure Management Authority,” which now controls all the properties and assets seized and confiscated over the past 72 years.
Seized Companies Shut Down
(A.Tours), a tourism company specializing in religious tourism and conferences, had a business volume of 150 million Egyptian pounds in 2013, with an average annual profit rate of 12%, according to (A.A.), the company’s manager and one of its founding partners.
He said, “I was imprisoned at the end of 2014 on political charges. The company was doing well, with two offices in Cairo and another governorate. We had plans to expand in 2015 with new, competitively priced tourism programs to overcome the recession at the time. But after a few months of my imprisonment, a decision was made to seize the company and the partners’ funds.”
He added, “I was the only one among the partners with experience in tourism, so after the company was seized, the judicial committee appointed an employee from the Tourism Holding Company to be the executive manager.”
“Within the first two months of her management, she caused most of the key staff to leave, and she started appointing other replacements. Some employees contacted me during my trial and informed me of several decisions made by the appointed manager from the judicial committee that severely impacted the quality of services provided, leading many of the company’s main clients, including businesses and businessmen, to move to competitors. Before the end of the first year of the seizure, the company began to collapse and could no longer pay employee salaries.”
During that time, the company’s assets began to deteriorate. The last employee I hired informed me that he witnessed some assets being sold to provide liquidity for the company before he resigned and moved to another company, cutting off all news about the company.”
“When I was released from prison, I went to check on the company and found that both offices had been closed, but the commercial registration and business license are still valid, although the company has no real activity. I learned from some friends in other tourism companies that my company’s share of Hajj and Umrah visas had been sold internally among companies under the name of ‘solidarity’ several times over the past few years.”
“My lawyer tried to obtain any reports from the judicial committee regarding the company’s financial status and current activity, but we were not provided with any documents, and we don’t know the company’s real situation now.”
(A.Tours) was not the only company to close its doors after being seized. By tracking the list of companies seized, dozens of them completely shut down after being seized and having committees appointed to manage them. The common factor among them was the absence of their original owners on the management committee.
Judicial committees form an executive committee to manage seized companies. These committees usually consist of an expert in the field, nominated by a relevant government institution, along with representatives from the Central Bank and members of the asset seizure committee. The company’s chairman or a board member is allowed to participate in this committee, with financial and administrative decisions being shared between the original owner and the newly appointed executive manager.
However, the companies that completely shut down, despite their diverse fields of work, shared the common factor of the absence of their principal owners from the executive management committee, either due to the arrest of all the owners or because the owners preferred to leave the country to avoid escalating matters and possible imprisonment.
Companies Resisting Mismanagement
“The fate of the companies depended on the people appointed to participate in management as representatives of the seizure committee. Some of my family members were imprisoned on political charges, and all our companies and properties were seized. But I decided not to withdraw and instead participated in managing the companies as a representative of the owners and a full member of the board until we obtained a court ruling to lift the guardianship over our companies.”
This is how businessman (A.H.) described his experience with the asset seizure committees over his family’s companies, which operated in several fields before their activities shrank and some were halted.
He said, “Some small projects went unnoticed because my focus was on the main company where our core capital is concentrated, so some subsidiary companies stopped after a while under the seizure… At the beginning of the asset seizure, they thought they were entering Aladdin’s cave, but they were surprised by the companies’ financial situation, with most of our capital tied up in goods, market funds, and assets. Therefore, their main goal was to seize all the assets and available liquidity, especially foreign currency, which caused major issues at the beginning. Some production lines stopped because we rely on foreign currency for imports, but they prevented us from using our balance. However, I decided to confront the situation, found alternatives, and managed to solve the problem to some extent. But the biggest challenge was their administrative practices with employees and department heads. They used policies to try to force them to resign and appoint loyal replacements, which they partially succeeded in doing. Still, I managed to keep the key people without whom work could not continue under those circumstances.”
He added, “I can say after nearly ten years of seizure that we’ve achieved a miracle by keeping the companies running until now. True, the number of branches has decreased, and production volume is lower. After achieving more than good annual growth rates, now every year there is a decline. But we’re still in the market and able to make profits despite all the obstacles posed by the seizure committee.”
“I can’t say that the seizure committee deliberately sought to harm the companies, but they are employees whose primary goal is to get every penny of the family’s wealth. They often intentionally disrupt operations to pressure us into revealing any undeclared warehouses or market funds we are collecting off the books. But in the end, they realized that we have a strict administrative and financial system, with all inflows and outflows accurately documented. This struggle has greatly affected the companies and continues to do so, but I’m confident that if the companies are removed from the seizure list, we can expand operations again and regain our core market share and more. But administrative obstacles or mismanagement, whether intentional or not, are currently preventing that.”
We identified 50 companies subjected to seizure between 2015 and 2018. When selecting the companies, we ensured that all had been officially announced as seized by judicial committees and that the seizure decisions were published in Egyptian media. We also considered the geographic diversity of the companies, covering eight governorates: Cairo, Giza, Qalyubia, Alexandria, Dakahlia, Sharqia, Menoufia, and Gharbia.
Upon analyzing the 50 companies, through field visits, phone interviews, and market activity monitoring, it was found that 29 out of 50 companies closed their doors within periods ranging from one to two years after being listed for seizure and having judicially appointed executive managers.
Meanwhile, 21 companies are still operating, 14 of which are functioning at the same production and work level, and 7 are operating with reduced production or work volume.
This means that 58% of the companies we tracked have completely shut down, while 28% are functioning normally, and 14% are operating but with reduced production and work.
Seizure Committees Beyond Oversight
Legal expert and international criminal lawyer Nasser Amin explains that the law defines the role of these committees as safeguarding the seized funds, inventorying them, and managing them in a way that does not harm them but rather enhances them, and then returning them with their earnings to their owners after the investigations or court decisions are concluded. This is the complete role of the so-called asset seizure committees.
Amin clarified that the law only grants the head of the judicial committee the authority and freedom to form special committees to manage companies on a case-by-case basis. However, it should be noted that only objective criteria should be considered in the formation, including legal, technical, and administrative aspects, as stated in the regulations. But in reality, there is chaos in the formation of these committees. Nepotism is rampant in their formation, and sometimes the management of companies is entrusted to people with no relation to managing such matters. Law firms with ties to the state manage these assets or become members of these committees, even though they have no connection to the technical nature of the seized company, creating a very dangerous environment.
He added, “According to the law, the judicial committee responsible for asset seizure is the entity to which one can appeal against such practices. But in reality, these complaints are rarely addressed. Often, given that most of those whose assets have been seized are either imprisoned or their relatives are, everyone fears the wrath of these committees that control the assets and manage them entirely.”
Amin pointed out that the committee appointed to manage the seized companies submits an annual report to the judicial committee responsible for asset seizure. The report includes the funds collected, profits made if any, and any cessation of activity. The committee has the right to investigate the reasons for the cessation of activity or to re-form the committee. Therefore, if we want to point fingers of blame for the cessation of business or the deterioration of company conditions, the responsibility lies with the judicial committee responsible for the seizure.
He clarified that there is no oversight whatsoever on the actions of these committees managing the companies. On the contrary, they hold absolute authority over the companies they manage, with no oversight except by the judicial committee that appointed them, leading to widespread corruption.
Exceptional and Prohibitive Measures
“I own a medical laboratory that was seized along with three branches in the same governorate in 2014. One morning, a committee arrived at the main lab with a security force, a judge, a university professor from the faculty of medicine, and an accountant from the governorate’s health department. Later, a chemist from the Ministry of Health’s Free Treatment Administration was added. They informed us that a decision had been made to seize the lab, and it would be put up for auction. If we wanted to buy it, we could!
My wife is the HR manager of the lab, and she contacted several authorities to understand the official decision and to clarify that they have no right to sell the lab as long as the decision is for seizure, not confiscation. The committee later informed her that the lab’s revenues would be deposited in a new bank account under the owner’s name until a final decision regarding the lab was made. However, until then, the lab would be rented out, and we could rent it from them if we wanted to. So, we started paying them monthly rent for the lab that I own!”
“An accountant from the governorate’s health department was in charge of overseeing the lab’s activities and collecting the rent with a vague receipt that had no details. We had no idea where these funds were going, nor were we informed about the bank account details where these funds were being deposited!”
“Within a few months, government contracts with the lab began to be canceled. We had contracts with the university and the health insurance system, which represented more than 60% of the lab’s income. When we reached out to contacts within those entities, we were told that the National Security Agency had instructed them to terminate the contracts with us, severely impacting the lab’s operations.”
“Despite this, I decided to continue operating and maintain the institution’s reputation. But they prevented us from upgrading the lab’s equipment, even though updating the equipment every four years is one of the lab’s key competitive strengths. As a result, the lab’s revenue significantly dropped, and now the income barely covers employee salaries and rent.”
“In 2016, the judicial committee suddenly decided to seize the lab again and assigned its management to a chemist from the Ministry of Health’s Free Treatment Administration. This lasted for a week before they offered to rent it back to us at a higher rate. We had to accept because the week under the chemist’s management nearly led to the termination of half the lab’s staff, in addition to poor management with clients. So, I decided to accept re-renting it at a higher rate, hoping to get a court ruling to lift the seizure and regain my assets.”
— Dr. A.S., medical analysis consultant and owner of a chain of laboratories in the Nile Delta
The New Authority: Broader Powers Without Oversight
Law No. 6 of 2024 establishes the “Asset Recovery and Seizure Management Authority,” which replaces all previous entities and takes over all the assets managed by the previous bodies. All employees of the previous administrations and agencies will be transferred to the new authority, which will have broader powers than any of its predecessors.
Legal expert Nasser Amin stated that the new law formed a unified entity to take the place of all previous bodies responsible for seizure operations and confiscated funds together. The new authority will be affiliated with the Ministry of Finance, and these funds will be included in the state treasury.
He explained that the risk lies in merging the seized and confiscated or recovered assets, as this grants broader powers, including full management of all these assets for the benefit of the Ministry of Finance. This new authority must be subjected to regulatory oversight, but unfortunately, the law does not specify subjecting this authority to the oversight of the Central Auditing Organization, which is the body that could exercise such oversight more professionally. The Central Auditing Organization contains diverse technical competencies, including accounting and technical documentation, making it the only place capable of carrying out this true oversight. However, the law did not specify or determine the entity responsible for this oversight.
The Judicial Committee Refuses to Respond
During the course of this investigation, we received numerous testimonies from owners of seized companies regarding mismanagement by the committees appointed by the judicial committee to manage the companies. Some company owners insisted on describing the reasons for their companies’ closure as corruption. In addition to the survey we conducted on 50 seized companies, we reached out to the head of the Committee for Procedures for Seizure, Management, and Disposal of Funds of Terrorist Groups and Terrorists, through a letter, requesting a response to the incidents observed during the investigation.
We focused the questions directed to the head of the judicial committee on understanding the number of seized companies whose operations were halted, the procedures the committee takes towards seized companies that cease operations, whether there is an investigation into the appointed individuals managing these companies, and whether the committee monitors the performance of the appointed individuals managing the seized companies that have ceased operations. We also inquired about the criteria the committee uses to select the employees appointed to manage the seized companies and the future of the seized companies and those whose operations were halted during the process of transferring their management to the new authority.
We sent a registered letter, which was delivered to the judicial committee’s headquarters on July 21, 2024, at 3:01 PM. As of the publication of this investigation on August 28, 2024, we have not received any response from the head of the judicial committee or his representative. We will continue to monitor the developments of this issue, particularly the process of transferring seized companies to the new authority, the policies that will be imposed, and whether any oversight mechanism will be activated for the new authority or not.
This investigation was produced under the Networks program, supported by the European External Action Service.
