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Casino Loan Fiasco Heats Up
Casino giant Tsogo Sun has been accused by its former founding
chairman of deliberately allowing Absa Bank to call up loans to two
black empowerment minority shareholders of the R250 million Hemingways
Casino.
Yesterday, Eastern Cape Gambling and Betting Board chairman Joseph
Lukwago- Mugerwa said Absa had probably already attached the 20
percent shares held by the two Eastern Cape based empowerment
consortiums, Efusini Consortium and Suvuka.
Their financial troubles have now sparked a war of words between the
holding company and its former Tsogo Sun founding chairman, Sipho
Tanana.
Tanana warned the casino group that it would lose its casino licences,
here and elsewhere, if it allowed Efusini and Suvuka to lose its
shares.
Tanana, who is a member of the Efusini Consortium, said it was Tsogo
Sun's responsibility to service the loans, which are understood to be
between R25 million and R30m.
The two minority shareholders have so far failed to pay Absa between
R1,5m and R2m in interest on the loans.
Tanana said he was the founding chairman of Tsogo Sun Emonti, as the
company is known, when it employed Tsogo Sun CE Jabu Mabuza. He
accused Mabuza and others of later "ganging up against me".
Tanana said the two black empowerment shareholders had an agreement
with Tsogo Sun.
"The basis of the agreement was that we would get the licence for
Tsogo Sun and that SA Breweries (which has a 49% shareholding in Tsogo
Sun) would provide finances and expertise."
Tanana said he personally signed all the agreements.
"There is no way that Tsogo Sun's licences will be valid if we (the
two black empowerment groups) are not there. As soon as they start
playing games with us, they will lose their licences, not only in
Hemingways, but also in Gauteng and Mpumalanga," he warned.
Tanana said in terms of the agreement Tsogo Sun must service the Absa
loan until such time Hemingways becomes profitable. "Then, when it
pays dividends, 20% of the dividends will come to us, the minority
shareholders, and 80% of it (will be used) to pay off the loans."
Read the
entire article at:
Sunday Times
2004 Online Casino News Archive
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