The Dutch investors’ association VEB has launched legal proceedings against the planned merger between Dutch fertiliser producer OCI and construction firm Orascom Construction, both of which are majority owned by Nassef Sawiris, who is described as Egypt’s richest man.

Limburg-based OCI has been listed in Amsterdam since 2013 but has been largely dismantled in recent years following pressure from activist shareholders. Since the merger plans emerged in September, the company’s share price has fallen by more than 35%, giving it a market value of around €650 million.

The VEB has asked the company court in Amsterdam to intervene ahead of an extraordinary shareholders’ meeting on 22 January, where investors are due to vote on the merger, the Financieele Dagblad reported on Monday.

The association says minority shareholders risk being seriously disadvantaged through the deal.

Under the proposal, OCI shareholders would receive 0.4634 shares in Egyptian construction multinational Orascom for each OCI share.

The VEB argues that the valuation is too low and describes the structure as “absurd”, saying it would force investors into a completely different business listed in Abu Dhabi, a market with limited liquidity and weaker protection for minority shareholders.

The Dutch shareholders’ lobby group argues the transaction involves a “massive conflict of interest” and serves no purpose other than benefiting the Sawiris family at the expense of smaller shareholders.

In its filing, the VEB asks the company court to order an investigation and to impose immediate measures to prevent the transaction from going ahead. These include blocking a vote on the merger at the January meeting and suspending the voting rights attached to shares held directly or indirectly by members of the Sawiris family.

The investors’ group fears that, if the deal is approved, it could be completed swiftly, leaving minority shareholders with “irreparable damage”.

It has also questioned whether the planned vote would amount to little more than a formality, given the controlling stake held by the Sawiris family.