The Egyptian administrative court will convene tomorrow to discuss the case of Palm Hills Development’s (PHD) land acquisition, which allegedly violates the law regulating tenders and auctions.
Almost 77 per cent of the units to be considered during the trial have already been sold, but the land being reviewed by this case represents only a small fraction of the company's total land bank.
"It only concerns 2 per cent of the total land the company owns, estimated at 48 million sq. meters," said Mohamed Ashour, an analyst from Al-Naeem investment bank.
The case was filed by lawyer and construction company owner Hamdy El-Fakharany in September, after the Administrative Court issued a verdict declaring that the Talat Mustafa Group’s (TMG) contract with the Ministry of Housing for ownership of Madinaty Compound's land through direct land allocation was illegal.
Founded in 2005 by Mansour and Maghraby Investment and Development, PHD has one of the largest land banks in the country.
According to its semi-annual report, the company's profits reached LE 191.4 million, an increase of 22 per cent compared with the same period last year. The case filed with the administrative court puts the company's project in Katameya at risk of suffering the same fate as TMG.
TMG witnessed a dramatic decline in its stock prices over the past couple of months as a result of the administrative court's verdict on its land ownership.