Egypt’s SODIC signs settlement in relation to 1,400 feddans of Sheikh Zayed land
On 21st of September 2015 a judgement was passed against the former Chairman of Egypt’s peroperty developer SODIC Magdy Rasekh in absentia and in the presence of other defendants, being non related parties to SODIC, with respect to SODIC’s Sheikh Zayed land of approximately 1,400 feddans.
On 21st of December 2016 a judgment was issued by the Court of Cassation confirming the former judgment issued, noting that the judgment and the penalties only concerned the aforementioned personnel in their personal capacity and did not involve SODIC, in accordance with the provisions of law.
Nonetheless, based on the above judgments, and during the course of the recent investigations carried out by the Illicit Gains Authority (IGA), SODIC was requested to respond to certain queries with respect to the land owned in Sheikh Zayed.
SODIC attended such discussions to ascertain its solid legal position and that SODIC had not committed any violations and was not part of any of the criminal proceedings mentioned above noting that these issues relate to contracts signed over 20 years ago.
Nonetheless the IGA insisted on the application of an Article of the Illicit Gaining Law claiming that the Company had gained from the violation, and that such gains must be returned with the possibility of settlement in accordance with Articles of the above mentioned law.
Given SODIC’s keen interest in maintaining constructive relationships and with the objective of avoiding lengthy legal disputes that may result in negative implications on the operation, and in the interest of all stakeholders, and as a proof of good faith, SODIC has signed a final settlement agreement on the 6th of December 2018 with the IGA.
SODIC accepted to pay a total settlement amount of 800 million pounds as a final and comprehensive settlement of all allegations raised against SODIC, to be paid over two years. In return, SODIC shall not be requested to pay any additional amounts as regards SODIC’s Sheikh Zayed plot of land and to be discharged from any claims with respect to this matter.
The amount will be paid from existing funding sources including the cash flows generated from SODIC West, the development on the concerned land plot.
SODIC is expecting future cash inflows in excess of 9 billion pounds from SODIC West. The firm maintains its strong financial position and exceptionally liquid balance sheet, and continues to leverage this strength to deliver to all its stakeholders while pursuing growth opportunities.
SODIC is one of the region’s leading real estate development firms and is currently developing a number of diversified projects in Egypt.
SODIC’s developments range from residential, retail, commercial, and large scale mixed-use city centers in east and west Cairo and Egypt’s north coast. SODIC is listed on the Egyptian Stock Exchange.