The security forces have seized the Seoudi and Zad supermarket chains after their owners were proved to be affiliated to and support the now-outlawed Muslim Brotherhood group. Zad supermarkets are owned by the Muslim Brotherhood's strongman and Deputy Supreme Guide Khairat Al-Shater, now in jail and awaiting trial on several charges, and Seoudi is co-owned by businessman Abdel-Rahman Seoudi. Ali Al-Demerdash, Assistant to the Interior Minister, told reporters that the judicial committee formed in late 2013 with the purpose of examining Brotherhood assets had found that both businessmen supported and funded the Muslim Brotherhood. Al-Demerdash said the security forces had seized the assets of both retailers, which have around 40 shops. Committee Secretary Wadie Hanna was quoted in Al-Ahram daily as saying that it was making an inventory of the assets which had been seized by the security forces. Minister of Supply Khaled Hanafi said on Sunday that the decision to seize the two supermarkets aimed at putting them under state control and not nationalising or confiscating them. He said they would be administered by the Egyptian Company for Wholesale Trade, a subsidiary of the state-owned Food Industries Holding Company. Hanafi added that the shops would re-open their doors to customers as soon as the inventories had finished, an operation that was expected to take around four days. He said that employee rights would be respected and the stores would be managed the same way as they had been before. Zad offers customers goods at lower prices than Seoudi, which serves a higher-end market segment. According to an economic analyst who preferred to remain anonymous, the decision to close the two retailers was “illogical.” The decision had lacked appropriate proofs that the businesses were used to support the Brotherhood and that they financed terrorist acts. “If this were proved, then it would be the state's right to seize and confiscate the assets of these businesses,” he stated. “But in this case, the proof cannot be found.” The economist said that he was against seizing the assets of the businesses because their owners were affiliated to the Muslim Brotherhood. “I was also against seizing the assets of members of the now dissolved National Democratic Party during the 2011 Revolution because they belonged to the then ruling party,” he said. He said the move sent mixed messages about the investment climate in Egypt. To Gulf investors, he said, it could be a sign of relief as it put more pressure on the Muslim Brotherhood, but for other investors it could be a negative sign. The Gulf States have been supporting Egypt since the toppling of Islamist former president Mohamed Morsi last summer. Saudi Arabia, the United Arab Emirates and Kuwait showered Egypt with a combined $12 billion aid package directly after Morsi's removal. Amr Adli, a post-doctoral fellow at Stanford University, agreed that shutting the two retailers could send negative signals to investors, especially if it was reiterated on a larger scale. He said that property rights in Egypt were already weak, and the present incident could make them weaker by linking them with the political affiliations of an investor. Adli said that such procedures were followed around the world if it were proved that a certain business was financing terrorism. It was not the first time for the procedure to be used in Egypt, he said. He said that a similar incident had occurred before with the same businessman, Abdel-Rahman Seoudi, when he was arrested in 2007 on terrorism charges but was later acquitted. The anonymous economist said that operating the stores through a state company was a positive gesture that would not bring work to a halt. He said that this form of management would be a temporary one, meaning that the action taken against the stores was not “nationalisation but seizure.” Members of various chambers of commerce have criticised the government's decision to seize the two supermarkets, saying that such practices could harm the investment climate as well as consumers. An anonymous member of the Egyptian Federation of Chambers of Commerce told Al-Masry Al-Youm daily newspaper that the retailers had operated a bar code system that monitored selling on an hourly basis and cash flow in the chains. The government should have informed the supermarket administration earlier of the decision and assigned internal management to manage the stores, he said. Mohsen Zaher, the owner of the Nile State Company for Cooperative Outlets, said that the decision to seize the stores “adds to the government sector and weakens the private sector as the government's share in the retail market has increased to 17 per cent of the local market.” He ruled out the possibility of adding the 40 shops to the state-owned consumer outlets, saying that there had been no final decision to confiscate the shops, but only a decision to manage the stores. While Zad supermarkets opened in 2012, Seoudi was established in 1938. By May, the committee tasked with assessing the Brotherhood's financial resources had frozen the assets of 30 of its members, 12 associations and several of the companies it owned. The Muslim Brotherhood was officially declared a terrorist organisation in December 2013 by Egypt's interim authorities.
