Wealthy Egyptian businessman Amr El Nacharty has threatened to take legal action against Chief Executive of UK supermarket group J Sainsbury's, Sir Peter Davis.
Former chairman of Sainsbury's Egyptian operations, Nacharty claims he was left in the lurch when the company pulled out of the Arab state in 2001, reported Evening Standard . He is demanding that Davis pay him for tax liabilities, which could amount to as much as 100 million British pounds ($169 million).
Sainsbury's set up shop in Egypt in 1999, partnering with Nacharty and his Edge Mart food chain. The company rapidly opened over 100 stores, hired 2,500 employees and stocked more than 15,000 product lines in its shops. The total investment was roughly £100 million.
Cairo’s small shopkeepers claimed that the huge store was driving them out of business and used the Sainsbury family's connections with Israel to fuel local antagonism. Demonstrations quickly turned into riots and stores were attacked. In response to the violence, Davis sold the business back to Nacharty.
After spending £51 million on stock acquisition and nearly the same amount again on business development, Sainsbury’s Egypt admitted to operating losses of £10 million in the first half of 2000.
Nacharty, an industrialist with interests in property and telecommunications, is arguing that he was left with exposure to unpaid taxes and other possible liabilities. “Mr El Nacharty is determined to pursue this matter through the courts in Egypt and the UK until he achieves full restitution,” said his spokesman.
News of the potential lawsuit marks a double blow for the struggling food chain. Sainsbury's reported 0.2 percent drop in second-quarter like-for-like sales as its rivals enjoyed a boom during the same period. Sainsbury's Supermarkets was established in 1869 and currently operates 535 stores throughout the UK. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
