CAIRO: An Egyptian court ruled on Tuesday to nullify the sale of government land to Talaat Moustafa Group, Egypt’s biggest listed developer, for its mixed-use Medinaty project on the outskirts of Cairo.
The court ruled that the New Urban Communities Authority, a body under the housing ministry, had broken the law by selling the land directly to Arab Company for Projects and Urban Development, a Talaat Moustafa unit, and not opening it up to bidding.
Talaat Moustafa said the sales contract was sound and the authority would appeal the ruling.
"The authority will honor its commitments and the company will implement its commitments to its customers," the developer said in a statement after the court handed down its decision.
Judge Hassan Sayed Abdel Aziz said the ruling applied to a 2005 contract and annex for the 8,000 feddans (8,304 hectares) on which Medinaty will sit.
The flagship project, which according to the firm’s website will include homes, hotels and a golf course, is underway, with some sales already completed and construction started on parts of the development.
Talaat Moustafa said the dispute was with the authority and not its unit.
The case was brought by Hamdy El-Desouki, who had argued he had not had the chance to bid on the land and it should have been offered at auction.
Talaat Moustafa shares, which had been trading around 1 percent lower before the news, closed down 8.4 percent compared with the benchmark index down 2.9 percent.
Analysts were surprised at the ruling, saying either that they did not know a case had been brought in the first place or that because there had been no news about it for such a long time, they believed it had been resolved.
One analyst, who asked not to be named, said he did not expect the decision to have a material impact on the Medinaty project and that an appeal would likely succeed.
Ahmed Mekky, a judge and vice-chairman of a Cairo appeals court, said the decision could be appealed in the Supreme Administrative Court, whose ruling would be final. –Additional reporting by Sherine El Madany.