The authoritative Egyptian newspaper Al-Ahram is reporting that the department store chain, Omar Effendi, privatized in a non-transparent and allegedly corrupt financial arrangement in 2006, is to return to public ownership within the month. Al-Ahram cited Egyptian Public Sector Enterprise Authority Representative Adel Mowazi as the source of the information.

Reversion to public ownership would be the first legal step taken by the new government to respond to allegations of corruption made by whistleblower Yahia Hussein Abdel-Hadi and filed with the Prosecutor General in February 2011, after the fall of the Mubarak regime. According to the allegations, an 85 percent ownership stake in the Omar Effendi chain was sold to a Saudi corporation in exchange for barely 50 percent of the amount calculated by the government’s own valuation committee. The deal was arranged and promoted by Mahmoud Mohieldin, now a Managing Director of the World Bank.

Yahia Hussein Abdel-Hadi accused Mohieldin, the ex-minister of Investment under Mubarak, of railroading the valuation committee into recommending the sale of the Omar Effendi sale to the Anwal Company of Saudi Arabia for an amount that was $100 million less than the cumulative valuation of the chain’s physical assets.

Although the new Saudi owners were to modernize Omar Effendi, renovate buildings, update marketing and rebuild inventory, most of the promised investments and improvements failed to materialize as Anwal and the state-owned company that had retained a 10 percent ownership stake clashed over financial responsibility for them. In October 2010, the Arab Investment Development Company (AIDC) proposed buying Anwal’s 85 percent stake in the chain, leaving 10 percent in the hands of the state-owned company and 5 percent in the hands of the International Finance Corporation of the World Bank. On December 1, 2010, however, AIDC withdrew its offer when Anwal’s outstanding tax bill came to light. The Egyptian tax authority had frozen the Omar Effendi bank accounts as it sought to collect approximately $17.5 million in back taxes.

As the Omar Effendi deal finally unravels, rumors are currently circulating in Cairo that an arrest warrant will soon be issued for Mohieldin in connection with this and other privatization deals, and his extradition will be sought. Nonetheless, as recently as April 15th, World Bank President Robert Zoellick denied any knowledge of an investigation of Mohieldin. Sources at the World Bank say now that the Egyptian Managing Director is seeking protection from extradition under the legal immunities enjoyed by Bank personnel. These immunities, however, should apply only to actions taken by Bank staff members in connection with their World Bank employment and not to actions taken previously as officials of national governments.

Beatrice Edwards is International Reform Director for the Government Accountability Project, the nation’s leading whistlebloweradvocacy organization.