CAIRO: An Egyptian court postponed to June 21 a hearing over a state land sale to Talaat Moustafa Group (TMG), the country’s biggest listed developer, in a case that has rattled investors in the property sector.
TMG’s $3 billion Madinaty project, which makes up the bulk of its land bank, has been caught in the legal dispute since September, when a court upheld a ruling to scrap the land sale contract because it was not publicly auctioned.
The cabinet returned the land to TMG late last year, arguing it was in the national interest, but the fate of the contract has been unclear since a popular uprising swept out president Hosni Mubarak and his government on Feb. 11.
A judicial panel is expected to submit its recommendation on the case ahead of the June court session.
A series of other court rulings have followed in the wake of the TMG case, gathering pace after Mubarak was pushed out. Palm Hills, the country’s second biggest listed developer, and Egyptian Resorts have already lost land.
Egyptian Resort’s main 41 million square meter plot Sahl Hasheesh resort is under threat, as the firm faces a legal challenge on its purchase of that land. Egyptian Resorts court session was also postponed to July 2.
The Egyptian tourism development authority already retracted its approval for selling land allocated for the project, a decision the firm said it would contest.
The cases hinge on conflicting laws governing state land deals. The original court ruling said a Housing Ministry body sold land to TMG in violation of a 1998 law. The government said it was following legislation which preceded that law.
Egypt’s independent media has closely followed the cases, portraying it as a battle to stamp out corruption and cronyism that favors a business elite closely tied to the government.
TMG’s first quarter net income slumped 48 percent to LE 169.4 million ($28.5 million), the firm said last week.
Shares in TMG dipped 1.4 percent by 1010 GMT, compared to 0.9 percent for the main benchmark index. Its shares have plunged over 50 percent since the start of the year, as investors await the outcome of the case.