Saudi Prince Alwaleed, with Rupert Murdoch (right). Image by Getty Images via @daylife  For several weeks a dispute has simmered in Egypt over agricultural land owned by Saudi billionaire Prince Alwaleed Bin Talal’s Kingdom Agricultural Development Co. In mid April, the Egyptian prosecutor’s office claimed that Alwaleed’s purchase of 100,000 acres of land in the Nile Valley delta in 1998 violated Egyptian law. Now, in a move that appears designed to minimize future conflict, Alwaleed’s company has agreed to return 75,000 acres of the total 100,000 acres in Egypt it had purchased.  A spokesman for Prince Alwaleed said the settlement and a memorandum of understanding was reached late Wednesday April 20. “Essentially we kept the best of what we needed to continue to conduct KADCO’s [Kingdom Agricultural Development Co.] business as is,” Shadi Sanbar, the chief financial officer of Kingdom Holding, Alwaleed’s Saudi-listed investment vehicle, said in an email.  A Ministry of Agriculture spokesman in Egypt was quoted by Reuters saying, “Both parties agreed to the return to the Egyptian government of 75,000 feddans [acres] out of a total of 100,000 feddans. The company will own 10,000 feddans while cultivating another 15,000 feddans that it doesn’t manage but will own in the future.”  The Egyptian government had recently complained that Alwaleed’s company had not followed through on its promise to develop as much of the land as it said it would. The grand plan behind the agricultural development, known as Toshka, was to turn fertile land into an agricultural hub that could feed Egyptians and export fresh fruits and vegetables to other Middle Eastern countries and Europe. While visiting with Alwaleed in Riyadh in 2008, the Prince put me on the phone with the Frenchman who he had put in charge of the Toshka project. He talked about growing a variety of vegetables. The water needed to irrigate the crops was to come from Egypt’s Aswan High Dam; Alwaleed stressed the importance of access to water rights to make the project succeed.  For some history of the back and forth between the Egyptian government and Alwaleed’s camp, see my earlier posts on the initial dispute and Alwaleed’s initial response, which offered several options for resolution (none of which included giving up most of the land.) To put this land concession in perspective, KADCO is just a tiny sliver of the assets owned by Alwaleed’s Kingdom Holding, worth far less than Kingdom’s stakes in Citigroup (C) and News Corp (NWS).  In the post-Hosni Mubarak government of Egypt, officials are questioning deals made by other wealthy businessmen as well. My colleague Zina Moukheiber reports here that Egyptian billionaire Yasseen Mansour and his two billionaire brothers are under pressure over a posh real estate development called Palm Hills; Yasseen has been charged with corruption.  Mubarak ruled Egypt for decades with a heavy hand. It’s natural that some of the deals he cut, or that happened under his watch, are now coming under investigation. That’s all well and good. However, the Egyptians in power need to be careful not to create an environment that is totally hostile to business people if it’s hoping to create jobs for the millions of educated but unemployed Egyptian people.
His Kingdom Agricultural Development Co. returns three-quarters of land owned Egypt in order to keep the business going.