Judges rule TMG land deal should be cancelled

Reuters News
Posted: Jul 08, 2012 4:40 AM
Judges rule TMG land deal should be cancelled

CAIRO (Reuters) - A panel of Egyptian judges said a court should cancel a judicial ruling last year that settled a damaging legal dispute over Talaat Moustafa Group's (TMG) flagship real estate project, state media reported.

The court battle, over the sale of state land near Cairo for TMG's $3 billion Madinaty development, sparked a crisis in Egypt's property sector, a vital source of jobs and investment for the wider economy.

The industry's problems deepened when President Hosni Mubarak was overthrown in a popular uprising in February last year.

TMG shares lost more than two-thirds of their value in 2011 but have soared 60 percent this year on optimism the company's worst problems are over.

The dispute lasted from 2010 until last November, when an administrative court ruling asserted the Madinaty deal was valid but a committee should revalue some of the land that had not been used since the company bought the site.

But on Sunday, the panel of judicial experts recommended the amended contract be declared void, and said the earlier court ruling that upheld the contract between TMG and Egypt's New Urban Communities Authority (NUCA) be cancelled.

Recommendations by panels of judges are not legally binding but courts often respect them.

State news agency MENA said the Higher Administrative Court had adjourned a review of the case until November 7.

(Writing by Tom Pfeiffer; Editing by David Hulmes)