Fate of Egypt's contested residential project Madinaty to be decided Tuesday

Ahram Online, Sunday 19 Jun 2011

A final verdict on the Talaat Mostafa Group's Madinaty land deal will determine the fate of the largest real estate project in the country

(Photo: AFP)

The Egyptian administrative court will reconvene on Tuesday as it prepares a final verdict on the status of Cairo's controversial Madinaty development. 

Madinaty comprises 65 per cent of the investments of the Talaat Mostafa Group (TMG), the largest listed real estate company in Egypt.

TMG's $3 billion Madinaty project, making up the bulk of its land bank, has been at the centre of a dispute since September 2010, when a court upheld a ruling that scrapped the sale of state land to TMG because it was not publicly auctioned.

The flagship developer posted a 48 per cent drop in first-quarter net profit last week on the back of a 51 per cent drop in new real estate sales.

TMG's original contract with the government for Madinaty was scrapped last year but the cabinet returned the land to the company under a new deal on the same terms based on its right to act in the national interest.

But since the ousting of Mubarak and his cabinet -- which signed the deal -- the fate of that contract remains unclear. It is being contested in courts, with a hearing later this month.

Illicit gains investigations have confirmed that Mubarak's sons have shares in this company via a private equity fund, Horus III.

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