Egypt’s government will protect investors exposed to a dispute over a sale of state land to Talaat Moustafa Group (TMG) and ensure similar cases do not occur in future, government ministers said on Monday.
Shares in TMG, Egypt’s biggest listed property firm, tumbled last week after a court upheld a ruling that a housing ministry body broke the law by selling land for the company’s landmark Madinaty project without an auction.
Investment minister Mahmoud Mohieldin said a cabinet meeting on Wednesday would come up with solutions to ensure the dispute is settled.
“When the issue is going to be resolved, there is going to be a precedent for resolving it so there shouldn’t be any kind of concern with similar cases in the future,” he told Reuters in an interview.
Finance minister Youssef Boutros-Ghali said the government would come up with a solution in coming days to “preserve the rights of all the shareholders and buyers” in Madinaty.
“The Attorney General has confirmed there was no fraud. It is an issue that will be fixed. It will be done within the next few days,” Ghali said at an event hosted by the British-Egyptian Business Association in Cairo.
TMG shares rose 2.1 percent on Monday, compared with a 0.7 percent gain by the EGX30 index. The stock is still down 9.6 percent this year, while the index is up 5.2 percent.
Brokers and bankers are concerned the dispute could deter potential homebuyers for TMG’s flagship project and the case has rattled investors who fear other land deals could be challenged.
Cash has poured into Egypt’s property sector throughout the global economic downturn as developers rush to address a shortage of middle-income housing and lay out high-end neighbourhoods, much of it on land once owned by the state.
President Hosni Mubarak on Sunday ordered an independent legal advisory committee to be put in place to resolve the Madinaty dispute.
Mohieldin said: “If you can just wait until the meeting that is going to be taking place, the cabinet of ministers on Wednesday, there is definitely something coming out from that meeting regarding the solutions — short-term or legal changes required. But definitely … I am confident this is going to be resolved.”
The debate revolves around a 1998 rule saying state property sales must be by auction, analysts say. Until 2006, the New Urban Communities Authority (NUCA), a housing ministry body, had sold land directly under a law that preceded the 1998 rule.
Housing Minister Ahmed el-Maghrabi has said one of the possible solutions was pushing forward new legislation in the next parliamentary session to resolve legal ambiguity over government land sales.
A parliamentary election is due in November.