Egypt developer’s Mubarak-linked chairman resigns

Egyptian real estate developer SODIC's chairman has stepped down, the firm said on Tuesday, adding to a list of resignations at property firms scrambling to distance themselves from the country's deposed president.

SODIC, Egypt's third-biggest property developer, has not been directly implicated in any of the land sale scandals that have torn through a once-booming real estate sector since a popular uprising toppled President Hosni Mubarak in February.

But the firm's chairman, Magdi Rasekh, is the father-in-law of Mubarak's eldest son Alaa, a tie some analysts believed could expose SODIC (OCDI.CA) to widening investigations as a patronage network centered on Mubarak's family unravels.

"When you have certain political affiliations at the senior level in the company it can become a distraction. I think the company wants to focus on its core business," said Naeem analyst Hisham Halaldeen.

Two former housing ministers under Mubarak, Ibrahim Soliman and Ahmed al-Maghrabi, have been arrested on graft charges. One of the charges against Soliman accuses him of selling land to SODIC for less than it was worth.

SODIC denies any wrongdoing in the contract and says all its land deals have been fair and legal. No charges have been brought against the firm, which has launched an advertising campaign emphasising its positive role in Egypt's economy.

Courts have already scrapped land deals for Egypt's two largest developers, Talaat Moustafa Group (TMGH.CA) and Palm Hills Developments (PHDC.CA).

Both firms had senior staff closely affiliated with Mubarak's now defunct National Democratic Party.

Another real estate firm, Egyptian Resorts (EGTS.CA), removed Ibrahim Kamel from its board last month. Kamel, a senior member of the old ruling party, is now in detention on charges of inciting violence against protesters.

SODIC board meeting records show that Rasekh had not been present for at least four of the last meetings, and many analysts had already suspected he would leave the company.

"Mohamed Magdi Hussein Rasekh, the chairman of SODIC, has offered his resignation from the company's board," the company said in a brief statement to the stock exchange.

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