Egypt’s SODIC -the country’s third-biggest listed developer- said on Tuesday that a court ruling that fined and sentenced its former chairman to prison over graft charges would have no impact on its shareholders or its assets.
A court on Thursday sentenced “Magdi Rasekh” -father-in-law of ousted President Hosni Mubarak’s eldest son Alaa and the former chairman of the luxury real estate developer- to five years in jail and fined him 2.34 billion Egyptian pounds ($388 million) in absentia in connection with a land deal.
The company said in a statement it had received a letter from the prosecution to clarify that the penalty would only apply to Rasekh’s personal assets, “without extending to the firm’s assets or the assets of the rest of its shareholders.”
“This is a case involving individuals and the company is not a party to the suit,” SODIC said in the statement, and added “Any penalty ordered by the court on the 29th of March involves only the individuals and will be paid from their personal accounts.”
To be mentioned that, Egypt’s once booming property sector has suffered from a series of legal challenges contesting the sale of state land to real estate firms.
The case was brought against Rasekh and Ibrahim Soliman, who was housing minister from 1993 to 2005, and the two were referred to the public prosecutor in May 2011, three months after Mubarak was ousted in a popular uprising.
Soliman was convicted of selling state land to businessmen for less than its market value, and the fines included compensation to the state as well as penalties. The court order does not require the return of the land, much of which has been developed by SODIC.
Rasekh had been board chairman at SODIC but stepped down last year, adding to a list of resignations at property firms scrambling to distance themselves from the country’s deposed president.