Orascom Development appeals against chairman's jail term

Egyptian real estate and hotels firm Orascom Development has lodged an appeal after a court made an initial ruling to jail its chairman over accusations of stock price manipulation and providing incorrect financial data.

Samih Sawiris was served the two-year prison sentence on Aug. 27 because he is the company's legal representative, said Orascom.

The court also fined him 50,000 Egyptian pounds ($8,401) and said he must not trade in the stock market for a year, a judicial source said last week, quoting the economic court's ruling.

The source said Sawiris had the right to appeal against the verdict and could remain at liberty on payment of 20,000 pounds' bail until a final decision is issued.

The company said on Monday that it paid the bail immediately, launched the appeal to suspend the judgment and has began discussions to settle all the charges.

"The company and Samih Sawiris believe that the allegations are unfounded," it said.

The main allegation, it said, was that parent firm Orascom Development Holding AG misrepresented the percentage of its ownership in subsidiary Orascom Hotels and Development (OHD).

The allegation centered on a discrepancy between the 98.16 percent stake shown in company financial statements and the 96.14 percent legal ownership given in a shareholders register.

The difference was due to an earlier non-recognition by Egypt's financial markets watchdog of a 2 percent ownership transfer which took place in December 2008, Orascom said.