The boss of one of Britain’s biggest supermarkets Sainsbury’s was just sentenced to two years in an Egyptian jail without bail for alleged embezzlement.
According to The Times newspaper, Sainbury’s CEO Mike Coupe was accused of allegedly trying to seize cheques
linked to a collapsed Egyptian business Sainsbury’s invested in 16 years ago. However, he was automatically convicted of the crime because he “failed to attend the court hearings.” This means he could be arrested if he travelled to Egypt.
Sainsbury’s appealed the conviction.
However, a spokesperson told The Times that the group was unaware that the court hearings were happening and denied all the allegations against him.
A Sainsbury’s spokeswoman to The Times: “We strongly refute the legal case in Egypt. This relates to an historic commercial dispute which has absolutely nothing to do with Mike.”
In a regulatory statement today, Sainsbury’s said:
“We are aware of media coverage today outlining a legal case in Egypt brought against our Chief Executive Mike Coupe. This relates to a historic commercial dispute in which Mike Coupe had no involvement and we strongly refute all the allegations.
“Mike Coupe was not employed by Sainsbury’s at the time of the original business deal in 2001 and has never met the complainant.
“When Mr El Nasharty bought our interest in the Egyptian joint venture we had with him in 2001, he paid us with cheques that were dishonoured. Mr El Nasharty is now claiming that Mike was in Egypt on 15th July 2014 and seized these cheques, which is an impossibility. Mike Coupe was in London carrying out his normal duties that day. In September 2014 Mike Coupe was convicted, without notice of the proceedings against him and in his absence, in an Egyptian Court. We have taken all necessary steps to appeal against these groundless claims and will continue to do so.
“This process is being handled by our legal team and we do not anticipate it having any material operational or financial impact on the company.”
The legal case
The conviction stems from Sainsbury’s attempt to enter the Egyptian market in 1999. It bought an 80% stake in Egyptian Distribution Group, also known as Edge.
However, Sainsbury’s and its acquisition faced fierce opposition from the Egyptian people and a boycott of its stores in Cairo and Giza. Less than two years after trying to enter the market, it made £10 million ($US15.3 million) of operating losses, and withdrew from the country.
Meanwhile, Sainsbury’s apparently sold back its Edge shares to its founder Amr el-Nasharty when it left the country in 2014. El-Nasharty claimed he was forced to take a charge of £111 million ($US170.3 million) to cover its losses.
He then claimed for compensation from Sainsbury’s after saying that he was unaware when he was sold back the shares that the business was insolvent and had substantial tax liabilities.
In July last year, Coupe took over from Justin King as CEO. Egyptian authorities alleged that he attempted to seize the cheques from the defunct company.
According to The Times, Coupe attended a court date in September against his conviction and was accompanied by Sainsbury’s executives, security staff, and the British ambassador John Casson.
“Attending court was the only option available to us. Failure to attend would have resulted in a confirmation of the conviction,” said a spokesperson to The Times, while adding that that the allegations were baseless.
“Mike was not even employed by Sainsbury’s at the time of the original business deal in 2001 which gave rise to these legal proceedings and has never met the complainant Mr el-Nasharty. Mr el-Nasharty has consistently made false allegations against Sainsbury’s and individuals within the business over the years, all of which have been unsuccessful.”
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