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Egypt to uphold verdict on Palm Hills deal

Cairo, May 9, 2011

Egypt's government will uphold a court ruling to scrap a sale of state land to developer Palm Hills but will ensure ordinary Egyptians are not hurt, the housing minister said.

An Egyptian court ruled last month that a state land sale to Palm Hills, Egypt's second biggest listed developer, was illegal and scrapped the contract, the latest in a series of similar rulings that have alarmed property investors.

Housing Minister Fathi Abdelaziz el-Baradei said the government was waiting for details of the ruling but would uphold the verdict, state-owned Al-Ahram newspaper reported.

"The government is keen to ensure that no citizen that has bought into these projects will be harmed," he said.
   
Property firms in Egypt are reeling from a string of legal challenges to their land holdings since a court ruled last year that a state deal with Talaat Moustafa Group (TMG), the country's biggest developer, was illegal.

In the TMG case, a court ruled that a government development authority illegally sold land directly to the firm instead of by auction. Egyptians saw that and other cases as part of a network of cronyism they said was rife during the era of President Hosni Mubarak, who was ousted by mass protests on February 11.

The latest verdict against Palm Hills scrapped the sale of a plot where there is an existing project, Palm Hills Katameya. The firm said it represented only 2 percent of its land bank.

Palm Hills, which has seen its share price tumble over 70 percent this year, has said it planned to appeal the verdict. - Reuters




Tags: Egypt | property | Palm Hills | TMG | Verdict |

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