It is several hours before the September 20 decision that will grant Gamal and Alaa Mubarak their release on LE100,000 bail. They have spent five days behind bars, after a court ordered that they be taken into detention alongside three other businessmen during a session in the protracted investigation into their alleged involvement in insider trading in the 2007 sale of Al Watany Bank. Behind the scenes, lawyers for the sons of deposed President Hosni Mubarak are in negotiations “to reach a settlement” over the decision to detain them.
A source close to the Mubarak family, who spoke to Mada Masr at the time on condition of anonymity, refused to specify the nature of the settlement that was reached. But the Mubarak sons were released a few hours later on LE100,000 bail.
While shrouded in mystery, the push by Alaa and Gamal’s lawyers points to a story that began outside the courtroom with the government’s concern over the political standing of the Mubarak sons, specifically Alaa’s public presence.
This concern provides a backdrop to the initial Cairo Criminal Court decision to issue what judicial sources tell Mada Masr was a detention order that lacked impartiality, as it contravened an expert’s report that largely tipped in Alaa and Gamal’s favor.
A source, who is close to the social circles of the two Mubarak sons, says that the lawyer informed the former president’s family that their legal position is strong, making it unlikely that the committee of experts will issue a new report that runs contrary to the initial one, which was requested by the judge to be returned to the committee and revised.
And this legal position is strengthened by what the Mubarak family feels is broad public sympathy for Alaa and Gamal. “Gamal and Alaa’s return to prison is no longer a source of relief for people, even those who were at the heart of the 2011 revolution, and this is indicated by the content of many of the letters received by the [Mubarak] family over the past few days,” the source says.
If the court’s September 16 decision to detain the Mubarak sons was an attempt to exert political control over them, it largely backfired and instead cleared the way for their near immediate release and a bolstered position for the once sidelined family.
According to judicial sources that spoke to Mada Masr, the groundwork for the defendants’ eventual release was laid in the initial September 16 ruling, when the Cairo Criminal Court, headed by Judge Ahmed Abul Fotouh, ordered that Alaa and Gamal, as well as business tycoons Hassan Heikal, Ayman Ahmed Fathy Soliman and Yasser al-Mallawany, be detained on charges of stock exchange manipulation related to the National Bank of Kuwait’s acquisition of Egypt’s Al Watany Bank. The five defendants were present at the hearing in which the court requested the expert’s committee to “complete its report” on the case before the next trial session, which was scheduled for October 20. A source previously told Mada Masr that the committee had submitted the report in July.
Following their detention, lawyers for the Mubarak sons and Mallawany submitted a request petitioning for the recusal of the investigating judges in order to move the trial to a different court within the same circuit, a motion that was accepted by circuit 26 of the Cairo Court of Appeals within 24 hours.
The president of the appeals court referred the case to another criminal court, headed by Judge Mohamed Ali al-Feqqi, who decided on September 20 to postpone the next hearing in the case to November 20 and to release the defendants on bail.
During the session, lawyers argued that the conditions did not necessitate the defendants’ continued detention, especially in light of the travel ban they are facing, their inability to influence witnesses and the fact that they had attended the majority of court sessions. The defense team also noted that the authorities are fully aware of all the defendants’ places of residence.
In the eyes of one judicial source, the criminal court’s two previous decisions to return the case to a court-convened committee of experts and to arrest the defendants were mistakes that made the job easier for the defense team and expedited the appeals court’s decision to recuse the investigating judges.
According to the source, while the request for the experts committee to revisit its report seems to reflect that the court is undecided on whether the defendants committed transgressions in the sale of Al Watany Bank to the NBK, their referral to the National Committee for the Recovery of Assets and Assets Abroad for further investigations suggests the opposite. The source says that in ruling to refer them to the asset recovery committee despite asserting that the report was “incomplete,” the court has revealed that it is convinced the defendants profiteered from the deal, which could be seen as violation of the principles of impartiality and neutrality necessary for it to adjudicate the case.
In its request that the committee complete its report, the court asked it to provide the establishment contracts of the Hermes Holding Company and its subsidiaries and determine the profits they obtained, as well as the share of these profits acquired by their founding partners. The court also requested the same information for the Naeem Holding Company and its subsidiaries, as well as HC Securities and Investment and its subsidiaries. The profits obtained by the International Securities Fund — which was co-managed by an offshore shell company owned by the Mubaraks — as a result of the deal were also requested, specifically the share obtained by Alaa and Gamal Mubarak in the acquisition of Al Watany Bank by the NBK.
The court’s request, of which Mada Masr obtained a copy, also ordered an examination of contracts and agreements regarding the sale between major shareholders of Al Watany Bank, EFG-Hermes and Al Naeem Holdings, and several contracts regarding deals between the NBK and HC, copies of which were included in the report.
The Cairo Court of Appeals’ acceptance of the recusal request and decision to refer the trial to a new circuit in the criminal court presided over Judge Feqqi means that the decision issued on September 16 to refer the defendants to the National Committee for the Recovery of Assets and Assets Abroad is up for consideration, Judge Ahmed Abdel Rahman, the first deputy president of the Court of Cassation, tells Mada Masr.
Press reports have indicated that the defendant have different stances on reconciliation, in light of the fact that the “experts’ report was in favor of the defendants and proved that they did not profit from illicit gains.”
The case, which involves nine defendants, dates back to October 2007, when the National Bank of Kuwait announced its success in acquiring a 93.77 percent stake in Egypt’s Al Watany Bank.
Osama Diab, a researcher at the Economic and Social Justice Unit at the Egyptian Initiative for Personal Rights (EIPR), previously told Mada Masr that information related to the sale was strategically leaked in 2005, and it became known that several bids had been put forth by public and private banks, leading EFG-Hermes subsidiary Horus II fund and Naeem Holdings subsidiary Nile Investments to each buy 7 million shares in Al Watany Bank between March and June 2006, and enabling the defendants, to obtain a seat on Al Watany Bank’s board of directors.
Nine defendants are implicated in the case: Ahmed Fathy Hussein Soliman (deceased), his son Ayman, Yasser al-Mallawany (former board member of Al Watany Bank and CEO of EFG-Hermes), Ahmed Naeem Ahmad Badr (former board member of Al Watany Bank and former managing director of Al Naeem Holdings), Hassan Heikal (CEO of EFG-Hermes), Gamal Mubarak (board member of EFG-Hermes), Alaa Mubarak (former board member of Bullion), Amr Mohamed Ali al-Qadi (former board member of Al Watany Bank) and Hussein Lotfy Sobhi al-Sherbiny (former board member of Al Watany Bank and managing director of HC Securities and Investment).
In September 2011, investigations began after a number of lawyers submitted reports to the public prosecutor about what they considered to be corruption in the 2007 sale of Al Watany Bank. Former Public Prosecutor General Abdel Meguid Mahmoud decided, in late May 2012, to refer the nine defendants in the case to the Cairo Criminal Court on charges of illegally profiteering over LE2 billion.
The prosecution accused Gamal and Alaa Mubarak of profiteering over LE493 million and LE12 million respectively. It also pointed out that between them, the defendants in the case owned a controlling share of the bank through which they agreed among themselves to control and sell, in violation of the rules and procedures governing disclosure in the stock exchange, which necessitates the public announcement of any information that could affect the price of stocks.
Tarek Amer, the governor of the Central Bank, formed the experts committee at the request of the Cairo Criminal Court, which tasked it with examining all decisions related to the sale of the bank. In November of last year, after being sworn in, the committee began its work preparing a report on the charges against the defendants.
This report dismissed the majority of charges leveled against defendants and argued that the procedures related to the sale took place in accordance with the capital market law. The report also refuted charges of profiteering and abuse of power, clarifying the details of the sale and purchase operation that took place in conjunction with the acquisition of the bank using details and figures.
When Gamal and Alaa were taken into custody, they faced a state-backed smear campaign, a source close to the social circles of both Alaa and Gamal says, most clearly seen in a column quoting Yasser Rizk, a journalist who was close to the head of the executive authority, as saying that Gamal Mubarak was in the process of concluding a political deal with the Muslim Brotherhood. The assertion is “laughable,” the source says, but also telling, because it reveals what the source describes it as “the executive authority’s discomfort with Alaa Mubarak’s public appearances,” where Gamal has completely disappeared from public life. The source adds that this potentially validates accounts that Alaa Mubarak was advised to shut down his Twitter account and stop commenting on current affairs, advice which he did not heed.
A source from a political party told Mada Masr earlier this summer that he had heard repeated and direct statements from security figures that indicated discomfort from within the higher echelons of the political ladder, attributing this to “the increasing presence of Gamal and Alaa and the increasing popularity they enjoy on social networking websites, and their seeming neglect of indirect messages passed on to them to not overdo this presence.”
The source, who asked not to be named, adds that the appearance of Alaa Mubarak at Al-Azhar Mosque at a dawn prayer during one of the final days of Ramadan and the wide celebration of worshippers of his presence caused him to be asked to stop appearing directly — which he did, until he appeared a few weeks ago at Ismailia Stadium during an Ismailia FC football match, a team he supports.
The source says that what is most disturbing to the government is the sense that the Mubarak sons have not accepted that they have become a part of Egypt’s political past, and they move as if there is a possibility of the return of the Mubarak name, in some form or another, into the political arena. He adds that security sources speak with incredulity of the fact that some of the Egyptian populace, which revolted against Mubarak, now expresses nostalgic sentiments for the days of his presidency. This has, according to security reports, prompted questions from foreign diplomats in Cairo, who ask their interlocutors about the possibility of Mubarak’s return to the political scene.
The source adds that security bodies have asked certain political parties to remind the public of the reasons for their displeasure with President Mubarak, especially highlighting that Mubarak was tolerant of the Muslim Brotherhood, and that without this tolerance, the Brotherhood would have not risen to power directly after his fall.
Despite this emphasis on downplaying the Mubaraks’ public presence inside the country, their arrest highlighted the lingering international interest in the two brothers. The source close to Alaa and Gamal’s social circles says that a number of Arab capitals contacted executive authorities in Cairo to inquire about their detention, some of which conveyed messages of solidarity with the sons of the former president, whom many Gulf capitals mobilized to support during the 2011 revolution and sought to exempt of incarceration.
The Mubaraks’ ability to participate in politics saw a new development on September 22, when the Court of Cassation overturned a reconciliation request in the presidential palaces case. Mubarak was sentenced to three years in prison in January 2016, while both sons were sentenced to four years in prison and a fine of LE125 million, for squandering LE125 million in state funds to renovate their residential properties.
The reconciliation request, which was submitted by their lawyer Farid al-Deeb, was made to remove the political consequences of the verdict, which puts the three as subject to the laws governing the practice of political rights, as its second article bans those who are convicted of a crime from voting or nominating themselves in elections for six years from when the sentence is completed (unless it is suspended), as well as Article 25 of Penal Code, which deprives Mubarak from his former official ranks and medals of honor.