April 17, 2011 / 10:27 AM / 7 years ago

Egyptian Resorts removes Mubarak associate from board

CAIRO (Reuters) - Egyptian Resorts removed Ibrahim Kamel, a senior member of ousted President Hosni Mubarak’s party now under detention, from its board, the company said on Sunday, without citing a reason.

<p>Ousted Egyptian President Hosni Mubarak speaks during a news conference with Israel's Prime Minister Benjamin Netanyahu (not pictured) in the Red Sea resort of Sharm el-Sheikh May 11, 2009. REUTERS/Amr Abdallah Dalsh</p>

Analysts said Kamel’s removal from the board may not ease pressures on the company’s stock, which has lost over 47 percent of its value since the start of year as the company reels under a legal challenge over a state land sale for its main plot of land on the Red Sea.

Egyptian Resorts is the second biggest developer of tourism real estate by market capitalisation.

Kamel, who sat on the board representing Kato Investment, which he chairs, will be replaced by another Kato executive, Abdel Monem Attia, Egyptian Resorts said in a note to the stock exchange.

Kato has a 12 percent stake in Egyptian Resorts. Kamel previously served as the chairman of Egyptian Resorts and is the father of the chief executive, Mohamed Ibrahim Kamel.

Ibrahim Kamel was arrested on charges of inciting thugs to attack protesters in Tahrir Square, the site of demonstrations that ousted Mubarak from 30-decades of power.

On Thursday, the tourism development authority withdrew its approval for a project Egyptian Resorts is developing at Sahl Hasheesh along the Red Sea coast. The firm said it would contest the decision, which sent the firm’s shares tumbling over 9 percent.

Egyptian Resorts paid $7.6 million, or 27 percent of the land’s contract value and paid a further $5.3 million in rent and other costs.

At large, the legality of its Sahl Hasheesh project is being contested after a lawsuit was filed saying the government broke the law in selling the land to the firm.

The firm, which makes most of its money selling land to developers, has not sold any since the third quarter of 2008, when the global financial crisis dampened appetite for big real estate purchases in Egypt.

The firm’s shares tumbled another 8.5 percent on Sunday by 1016 GMT, while the benchmark index was trading 2.9 percent lower.

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