Arabian Centres clarifies auditor opinion on cancelled title deed for Riyadh land

Arabian Centres Co. headquarters

Arabian Centres Co. (ACC) clarified the announcement, made on Nov. 11 as part of its Q2 2021-22 financial statement under note 8 (iii), according to a bourse filing today, Nov. 17.

“This amount includes a piece of land in Riyadh that was acquired by the group in 2013 from a private real estate investment fund with a carrying value of SAR 1.770 billion (March 31, 2021: SAR 1.770 billion),” the clarification statement said.

The land is under development, under an approved scheme issued by the Riyadh Development Authority. The carrying amount of the development is SAR 628 million (March 31, 2021: SAR 519 million).

The Supreme Court, through its decision dated March 7, 2021, cancelled certain land title deeds citing the violation of applicable legal procedures for the transfer of title deeds and subsequent deeds.

Consequently, the title deed of the land owned by the group was cancelled, the statement added.

The group submitted a letter to King Salman, on Sept. 20, 2021, requesting the cancellation of the Supreme Court decision as:

- The royal decree, issued on Feb. 23, 2021, directs to form a team to resolve the issues of the deeds that are within an approved scheme and, therefore, should not be assigned to the courts;

- The real estate in the deed was purchased under a proper sale purchase agreement by the group;

- The infrastructure development of the land started after obtaining the required approvals from authorities, in line with the approved scheme issued by the Riyadh Development Authority, and under the supervision of the Riyadh Municipality.

Based on an opinion from an independent legal counsel and recent precedents, management is confident that their request will be considered and the land title will be reinstated, the statement said.

Further, the management believes that the rightful land ownership of the group is not impacted merely on account of certain legal procedures not being met on transfer of the original land deed. Thus, the group continues to control the land and its use and continues the construction and development of the land.

Furthermore, the independent legal counsel confirms in the remote instance the request is rejected, the group has legal recourse available to recover the cost of land and any related damages from the seller.

According to data compiled by Argaam, ACC recently announced that the title deed of the land located on King Khalid Road, in Riyadh, was canceled by a court decision.

ACC Chief Executive Officer (CEO) Faisal Al-Jedaie, in a statement to Argaam, said that the Jawharat Riyadh project’s land plot at Al-Raed district was purchased legally from a well-reputed judicial person. He also affirmed the company’s confidence in the judicial system and the Kingdom’s laws