State commissioners from the State Council's Administrative Court recommended invalidating a contract allocating 3 million square meters of land in Ain Sokhna to businessman and former MP Hesham Talaat Mostafa, owner of the Porto Venice company and former head of the property firm Talaat Mostafa Group (TMG).
The contract allocated the land to Mostafa by direct order for LE400 million. The commissioners found that it was in violation of Law No. 89 from 1998 that governs bids and tenders.
Former MP Hamdy al-Fakharany had filed a lawsuit to invalidate the contract. The court would convene on 17 March to consider the recommendation.
The Supreme Administrative Court is also hearing another case against Mostafa on 16 April, also regarding the disputed sale of land for TMG's flagship Madinaty real estate development project.
In 2010, a court had ruled to overturn the sale of state land for the US$3 billion Madinaty development, saying the land was undervalued in the sale. The ruling rattled investors and the case has progressed slowly since then, with negative consequences for the real estate development sector.
The state signed a new contract with the company in November 2010 but Fakharany, who had contested the first contract, also contested the second.
Mostafa is currently serving a 15-year prison sentence for his role in the murder of Lebanese singer Suzanne Tamim. He was found guilty of paying an Egyptian security man to kill Tamim in 2009, and sentenced to death by hanging.
After a retrial in 2010 the verdict was commuted to the prison sentence, which was upheld after an appeal in February 2012.
The security officer, Mohsen al-Sukkary, was sentenced to life in prison. An appeals court upheld the sentence in a ruling issued late on Monday.
Edited translation from Al-Masry Al-Youm