Egypt legal body orders Palm Hills deal scrapped

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CAIRO: An Egyptian judicial panel ruled on Tuesday that a state land sale to Palm Hills Development, Egypt’s second biggest listed developer, was illegal and should be scrapped.

Palm Hills Development was the second company to face such a ruling, after a court ruled Talaat Moustafa Group’s $3 billion Madinaty contract be scrapped, in a case that underscored the risks of investing in Egyptian real estate.

"The contract signed between the New Urban Communities Authority (NUCA) and Palm Hills violated the auctions law because it was signed by direct order," the body said.

Hamdy Fakhrany, who filed the case against TMG, also filed the Palm Hills suit, contesting a 960,000 square meter plot of land in a Cairo suburb, saying it was sold by NUCA, a housing ministry body, at below the market price.

The Palm Hills case is now being heard in courts and the judicial panel on Tuesday advised the contract be scrapped because it was sold in violation of the law and below market prices, a statement said.

The judicial panel often has influence over court verdicts.

The cases hinge on conflicting laws governing state land deals. The original court ruling said a housing ministry body sold land to Talaat Moustafa Group in violation of a 1998 law.

The government said it was following legislation that preceded the 1998 law.

Egyptian media have followed the cases closely, portraying them as a battle between a judiciary protecting the rights of ordinary citizens and a business elite pampered by the government.


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