Mubarak-era textile mogul referred to prosecution for monopolization

The Egyptian Competition Authority (ECA) referred Oriental Weavers Carpet Company (OW), owned by Mubarak-era businessman Mohamed Farid Khamis, to the prosecution on Tuesday with charges of monopolization.

The head of the ECA, Mona al-Garf, stated that the board decided unanimously to refer the case to the prosecution, after uncovering deals OW made with distributors, preventing them from working with rival companies. Article 8 of the Competition Protection Law, prohibits tying contracts or business deals with “irrelevant conditions.”

The move is made possible by an amendment to the law, adopted in 2014, which allows the ECA to refer cases with proof of violations directly to the prosecution.

However, Garf complained in an interview with privately owned Al-Tahrir newspaper published on Tuesday that the efficiency of the ECA is hampered by the slow procedures of the courts, whose lengthy prosecutions can last years and lead to no action being taken.

The ECA stated that Oriental Weavers control 90 percent of the industrially-manufactured rugs market and that, if convicted, the company would be required to pay a fine of LE300 million.

The company was established in 1979 and distributes in over 130 countries worldwide. Khamis, its founder and CEO, had strong ties to the Mubarak family and represented the ruling National Democratic Party (NDP) in parliament. In 2008 he was called to testify in front of the general prosecution on bribery charges but never stood trial.

In 2013, steel tycoon and fellow NDP member Ahmed Ezz, was acquitted of monopolization charges. He was released on bail in 2014, pending separate trials of corruption, after spending over three years in prison.