Egypt court rejects TMG Madinaty appeals, shares fall

An Egyptian court upheld Tuesday a case canceling the sale of a 33 million-square-meter plot of government land on the city’s outskirts to Talaat Moustafa Group (TMG) Holding.

A court on June 22 canceled the sale of the land due to irregularities in the way it was sold. The state-run New Urban Communities Authority, which sold the land, appealed the ruling.

“The consensus view was the ruling was going to be overturned, so this is a negative development in the short- term,” said David Spiez, an analyst at Citigroup Global Markets Ltd. in Dubai. “People will now seek clarity as to the status of units that have already been sold.”

TMG’s legal advisor said that his group will contest a higher court decision to uphold the ruling that threatens the real estate company's flagship development.

"It is clear that the group, its investors … will not leave the matter as it is, and they will seek legal appeals," the legal adviser, identified as Doctor Shawky, told al-Arabiya television, adding that the project would continue and that there may be non-legal options available to the company.

The New Urban Communities Authority received housing units valued at 13 billion Egyptian pounds (US$2.3 billion) in exchange for selling the land to the Cairo-based real-estate developer, the prosecutor found, a local newspaper reported last month.

An administrative panel in August said it recommended to the court that the contract for the company’s purchase of land issued by the New Urban Communities Authority be annulled.

TMG shares fell 7 percent to 6.9 Egyptian pounds at 1:58 p.m. in Cairo, valuing the company at 14 billion pounds.

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