Cairo – Mubasher: The initial public offering (IPO) process of Sarwa Capital has violated the capital market’s regulations, the Financial Supervisory Authority’s (FRA) deputy chairman said.

The Egyptian financial regulator’s decision to suspended Beltone Financial Holding’s IPO unit from carrying out any activities came after finding that Sarwa Capital had been exposed to irregularities in IPO procedures, Khaled El Nashar told Reuters.

He stressed that the irregularities had constituted a risk to shareholders and the FRA’s intervention came in alignment with law to protect the market.

Beltone, which is controlled by billionaire businessman Naguib Sawiris through his company Orascom Investment Holding, has the right to take legal measures to protect the decision, El Nashar noted.

On Thursday, the FRA suspended Beltone’s IPO unit from carrying out any activities for a six-month period, giving no explanation for the decision.

In October, Beltone managed Sarwa Capital's IPO, which was listed on the Egyptian Exchange (EGX) on 15 October and shortly after its stock retreated by 15%.

Beltone said on Thursday that it had not violated any regulations, noting that it planned to pursue legal measures to protect its interests and those of its shareholders and customers.

Meanwhile, the Middle East News Agency (MENA) reported, citing unnamed sources, that the reason for the suspension was for violations and manipulations in Sarwa Capital's IPO.

Last month, the EGX said that the IPO and the private offering of Sarwa Capital have been implemented at a combined value of EGP 2.17 billion.