MEPCO sues MEWA to reassess fair payment over expropriated land

Logo of Middle East Paper Co. (MEPCO)

Middle East Paper Co. (MEPCO) announced the filing of a lawsuit against the Ministry of Environment, Water and Agriculture (MEWA) - Makkah Region Branch -in Jeddah Administrative Court.  

The company obtained a final judicial ruling on Sept. 10, 2018, compelling the ministry to establish the committee stipulated by the regulations to assess the fair compensation from July 4, 2007, to December 15, 2016, MEPCO said in a statement to Tadawul. 

This period encompasses the time between the expropriation of the company's property and the disbursement of compensation by the ministry, it added.  

MEPCO stated that the ministry's designated lawyer had informed that the compensation assessment amounted to SAR 2.6 million, which was unacceptable to the company.  

Consequently, the company sought the services of an accredited real estate appraisal office recognized by the Saudi Authority for Accredited Valuers (TAQEEM). The appraisal report concluded with an estimated fair compensation value of SAR 74.06 million, which exceeds 5% of the company's net assets according to the latest audited financial statements.  

Accordingly, the company has filed a lawsuit with the Administrative Court in Jeddah, seeking a reevaluation of the fair compensation in accordance with the real estate appraiser's report.   

MEPCO has appointed a certified real estate appraiser and assigned an external lawyer to file the lawsuit and defend its interests. 

The company said it could not determine the financial impact, legal consequences, and risks associated with this case at the moment. Any developments regarding this case will be disclosed in due course. 

MEPCO pointed out that it had previously announced on July 10, 2016, receiving a letter from the National Water Co. (NWC) indicating the final compensation amount of SAR 132.73 million towards expropriating its property, covering the land value and associated constructions.  

On Dec. 14, 2016, the company disclosed the latest developments related to the expropriated property, including receiving full compensation amount and transferring the property to NWC.