Dubai developer Damac Properties said Tuesday it had filed an international arbitration case against Egypt in a bid to appeal the conviction of its Emirati chairman on corruption charges.
The company said the judgment was politically motivated and a “classic case of ‘guilt by association” which contravenes a bilateral investment treaty between the UAE and Egypt.
“He was convicted in a sham criminal proceeding that was rushed through Egypt’s judicial system at lightning speed,” the developer said in an emailed statement.
Hussain Habib Sajwani was sentenced ‘in absentia’ to five years’ jail and a fine of $40.5m in Cairo last week after being found guilty of buying tracts of public land in the Red Sea province below their market value from Egypt’s former tourism minister Zoheir Garranah.
Damac said the charges, which result from a 2006 deal to purchase 30 million sq m of land along Egypt’s Red Sea coast, raise “serious questions” about the safety of investing in Egypt.
“While the Egyptian court held that the price paid for the Gamsha Bay property was too low, the transaction was entirely proper, and Damac was entitled to rely upon the price charged by the government at the time,” said Mr Sajwani’s counsel, Ken Fleuriet, of law firm King & Spalding.
“It was an arms’ length transaction that was fully vetted by the appropriate Egyptian officials at the time of purchase.”
Garranah is the second member of former President Hosni Mubarak's cabinet to be jailed for financial misconduct, after a widespread political uprising ousted the leader from power.
Former interior minister Habib el-Adli was jailed for 12 years earlier this month on charges of money laundering and profiteering.
Army generals who took control from Mubarak are under pressure to take a hard line against high-level corruption and show they are forging political change before an election for a new parliament in September.
Damac said the conviction of Mr Sajwani violated basic tenants of due process and claimed the courts failed to inform him of the case and was denied representation by counsel during several important hearings.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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