The Cairo Court of Appeal is considering a request submitted by Egypt’s newly appointed Prosecutor General Hesham Barakat to temporarily freeze assets of senior Muslim Brotherhood leaders, as well as a number of allies of deposed President Mohamed Morsi, the state-run Al-Ahram daily reported on July 22.

The appeal comes in the context of investigations into charges against Brotherhood leaders of inciting violence and killing. The freeze is temporary and awaits investigations in current cases related to the violence in Moqattam, Nahda Square and the Republican Guards headquarters, all of which witnessed clashes during and after the June 30 protests that ended with Morsi’s ouster.

The crackdown on Morsi’s associates involves 21 senior leaders from the Muslim Brotherhood, Jama’a al-Islamiya and the Wasat Party. The leading figures from the Brotherhood that are under investigation include Mohamed Badie, the supreme guide of the Muslim Brotherhood, Khairat al-Shater, businessman and top leader within the group, as well as Mahmoud Ezzat, Mahdi Akef, Saad al-Katatny, Essam al-Erian and Mohamed al-Beltagy.

Others figures associated with the Brotherhood and facing charges include former parliamentarian Mohamed al-Omda, Wasat Party Vice President Essam Sultan, Jama’a al-Islamiya leader Assem Abdel Maged, as well Salafi preachers Safwat Hegazy and Hazem Abu Ismail. Many of these figures are already in custody, while others have received arrest warrants.

The Public Funds Prosecution also opened an investigation last week into charges accusing Muslim Brotherhood leaders of illegitimately pocketing foreign funding designated for Morsi’s presidential campaign. The charge entails receiving US$10 billion in grants from Qatar, according to Al-Masry Al-Youm privately owned daily.

Banks have been requested to stop all transactions related to the accounts of these individuals, after the Central Bank of Egypt was notified of the freeze. Meanwhile, the Egypt Stock Exchange is examining if any of these figures have a code registration that enables them to buy and sell stocks in the market.

“It is a standard procedure to freeze the assets of figures during investigations, especially if the accusations threaten national security. [The freezing is] to prevent them smuggling their money abroad,” says Osama Mourad, a market analyst.

The Egyptian authorities took the same measures instantly after the January 25 revolution against top figures of the regime of former President Hosni Mubarak for fear that they might try to transfer their capital abroad.

In the last two years, a number of businessmen with ties to the former regime had their assets frozen, including steel tycoon Ahmed Ezz, Mubarak’s business associate Hussein Salem, and former Minister of Industry Rachid Mohamed Rachid, among others.

Mourad explains that many of the Brotherhood figures have businesses and companies and they trade in the stock market. Shater, considered the Brotherhood’s chief financier, has a small investment bank and businesses that range from furniture and clothing to bus assembly and pharmaceuticals. It is at this stage impossible, however, to estimate with precision the amount of frozen assets so far.

It is easier to calculate the amount of capital traded in the stock exchange than to estimate the amount of money seized in banks due to banks’ confidentiality, Mourad explains.

The Brotherhood still has many other sources of funding and liquid assets, according to Mourad. He rebuffs the claim that the capital seized in the stock exchange or in banks will not affect in anyway the financing of the sit-ins at Rabea al-Adaweya and Nahda Square.

Both sit-ins, housing a few thousand, have been staged to demand the reinstatement of Morsi as president.

The scope of the Muslim Brotherhood’s economic activity and funding sources is unclear. Its financial system is considered one of the group’s most closely guarded secrets, directly managed by the general guide and his deputies.

Leaders of the group claim that there is no central economic body responsible for funding its activities, as all funds come directly from membership fees.

But the Brotherhood has always reportedly pushed its members to enter into commerce. A number of them have made money in the real estate, food, textile and health sectors.

The formation of EBDA, a Muslim Brotherhood-led business association, shortly after the revolution was seen as an effort to strengthen the standing of business figures in the Brotherhood.

Omar Sherine, EBDA media coordinator had no comment on the decision freezing the assets of leading Islamist figures, saying that the association has nothing to do with it, even if any EBDA members are included in the asset freezing campaign.

Mourad denies that the decision to freeze the assets is politicized, as some of the charges being investigated include corruption and profiteering.

But even with such charges and investigations, “it is not a big deal, as the different parties can always start a reconciliation process and reach a settlement, as was the case with Rachid, Ezz, Salem and others,” Mourad claims.

He says that the decision to freeze the assets of these pro-Morsi figures was taken to put pressure on them to enter into negotiations with the current regime.

Mohamed Gouda, head of the economic committee of the Freedom and Justice Party, the political arm of the Muslim Brotherhood, agrees.

“The decision to freeze the assets of senior Muslim Brotherhood leaders was taken to force the group to agree to negotiations and to start talking with the current regime,” Gouda says.

On the relationship of the Brotherhood with the new government, Abdel Fattah al-Sisi, minister of defense and commander of the Armed Forces, which ousted the president following mass protests, said in a speech earlier this month that no one would be excluded from the political process.

“All political forces without exception must realize that an opportunity is available for everyone in political life, and no ideological movement will be prevented from participating,” he said.

But the Muslim Brotherhood has so far rejected any part in the current political process describing the current government, presidency and their decisions as illegitimate.

Most of the Brotherhood leaders at the sit-in at Rabea al-Adaweya have said that they are not pursuing negotiations through any channel, confirming that they will only engage in talks after Morsi is reinstated.

Meanwhile, the freeze list does not include leading businessman in the Brotherhood and president of EBDA, Hassan Malek. Ahmed al-Wakil, chairperson of the Federation of Egypt Chambers of Commerce, explained to al-Watan privately-owned newspaper that Malek did not formally exercise political action and was not directly involved in funding the Brotherhood sit-ins or inciting violence.

“Malek is the only Brotherhood leader who kept silent after the June 30 demonstrations, and is well known among the business community for his calm persona, in contrast to the rest of the members of the group.”

Gouda has reservations and worries about the business community in Egypt; especially that these decisions are targeting a certain political faction. He is concerned that businesses, activities and interests associated with Islamists will be targeted and come under attack in the coming period.

“The military coup has sent Egypt back to the time of a security-controlled state, which doesn’t respect the constitution or court rulings,” adding that these strategies employed now against the Brotherhood’s business interests are the same as those used to intimidate Islamists under Mubarak’s rule.

“We have experience of harsh situations and are prepared for hardship. In fact we get stronger when we are hounded,” explains Gouda, pointing out assets freezes and jail sentences did not prevent the likes of Shater and Malek from grooming their business empire.

However, Gouda believes that the year the Brotherhood was in power has had a negative impact on the group.

“We have lost our popularity and capability to spread our ideas among the people. Actually they — current government — may be doing us a big favor as the Brotherhood is usually at its best when it is being persecuted by the state regime.”

Noha Moustafa 

You have a right to access accurate information, be stimulated by innovative and nuanced reporting, and be moved by compelling storytelling.

Subscribe now to become part of the growing community of members who help us maintain our editorial independence.
Know more

Join us

Your support is the only way to ensure independent,
progressive journalism