CAIRO (NNA) – The managing director of the Egyptian Sekem Group, Helmy Abouleish, has been sentenced to a suspended prison sentence of one year and a fine in connection with charges of illegal funding from the Egyptian Industrial Modernization Center (IMC) for Sekem companies while he was serving on the IMC. Abouleish intends to lodge an appeal against his conviction.

In a press release, Sekem said that Abouleish had been released from custody on 7 July after 100 days.

According to the Sekem statement, the court in its ruling had followed the application of the state prosecutor who had argued that the IMC should be considered as an ordinary Egyptian authority and not as a body whose activity is governed by separate legislation. It remained in dispute to the end, however, which legal framework applied to the way that IMC funding was disbursed, Sekem said.

The IMC is an economic development fund with funds of 450m euros established by the European Union and the Egyptian government under the separate cooperation act 66-1999. It was funded originally by the EU, the Egyptian government and the Egyptian private sector, but in 2006 the EU transferred its share to the Egyptian government.                           

Helmy Abouleish was managing director of the fund from 2005 to 2006 and subsequently on its supervisory board.

According to the Sekem statement, the disbursement guidelines under the cooperation act permitted the funding of measures benefiting Sekem companies under the given circumstances. Furthermore, Abouleish had allowed a period of nine months to pass after finishing as managing director before agreeing to new funding for Sekem companies.

IMC funding is not paid directly to the funded companies but goes to providers of training and modernisation measures.

Furthermore, all measures were regularly audited by internal and external inspection agencies as well as the appropriate EU offices, the press release said.

A legal opinion sought at the start of proceedings against Abouleish had confirmed this interpretation.

Although the supervisory board does not exercise any executive functions, the state prosecutor had argued that Sekem companies had not been entitled to IMC funding while Helmy Abouleish was on the board.

After sentencing, Abouleish reaffirmed his view with regard to the legal situation and announced that he would lodge an appeal against the sentence. However, he now intended to devote himself again primarily to the Sekem companies and continue to work for the sustainable development of Egypt.

The Sekem Group of companies is part of the Sekem initiative for sustainable development established in 1977 by Dr. Ibrahim Abouleish and produces, processes and markets organic and biodynamic foods, textiles and herbal medicines in Egypt, the Arab world and international markets.

END/nna/cva

Item: 110720-01EN Date: 20 July 2011

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