Oriental Weavers denies offering settlement in monopoly case

Carpet manufacturer Oriental Weavers has denied that it is seeking reconciliation with the Egyptian Competition Authority (ECA) on charges of monopolistic practices.

The statement comes in response to reports in local media last week that the company had offered to pay compensation to settle the suit, an offer that was reportedly rejected by the anti-trust watchdog.

On August 18, the ECA referred Oriental Weavers to prosecution on allegations that the company made deals with distributors that prevented them from selling competitors’ products, in violation of the competition protection law.

The ECA stated that Oriental Weavers controls 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 denied the charges in a statement dated August 18.

Oriental Weavers claimed that in some contracts inked before 2012, it gave independent distributors a sales commission if they agreed to sell only Oriental Weavers’ products. However, the company said those exclusivity clauses were removed in 2012.

The statement also disputed the ECA’s claim that Oriental Weavers controls 90 percent of the market, citing statistics from the state’s CAPMAS agency, which indicate that the company has a 53 percent market share. Importers control another 23 percent and other local companies make up the balance.

The company was established in 1979 and distributes in over 130 countries worldwide. Mohamed Farid Khamis, its founder and CEO, had strong ties to the Mubarak family and represented the formerly 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.

Khamis is not the only Mubarak-era businessmen to have faced an anti-trust lawsuit. Steel tycoon, former NDP secretary general and would-be parliamentary candidate Ahmed Ezz was also accused of monopolistic practices in his steel company, but was acquitted in 2013.