Scorpio Real Estate Ltd. (TASE: SCRP.B1), controlled by Beny Steinmetz, is becoming embroiled in Ukraine. The company today reported to the Tel Aviv Stock Exchange (TASE) that statements of claim, filed by the Kiev municipal authorities at the economic court in the city, had been received at the offices of indirectly controlled subsidiaries in Ukraine, which hold the lease rights to land for the Borispol project in Kiev.
In the claim, the municipal authorities allege that the lease rights granted to the subsidiaries by the municipality in 2004 are for an area that exceeds the maximum area that the Kiev municipality was entitled to lease. The municipal authorities are therefore asking the court to rule that the lease rights are invalid, and that the subsidiaries must return the land to the Kiev municipality.
The subsidiaries told Scorpio that they were consulting their legal advisers concerning the consequences of the claim, and the legal remedies available to them. They said they would file their response to the court in the coming days.
Scorpio added that at this stage, it was unable to assess the chances that the claim would be upheld.
The value of the land in the project in the company's books as of the end of the third quarter of 2014 was NIS 67 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 25, 2015
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