Royal clash looms over casino deal - Monday 4th of August 2008

Global hotel group Sun International is set for a royal showdown with the amaMpondo monarchy over the renewal of its casino licence for the Wild Coast Sun. King Mpondombini Sigcau wants the Eastern Cape Gambling and Betting Board to investigate the validity of a lease signed between Sun International and the former Transkei homeland government almost 30 years ago.

The clash between Sigcau and Sun International is set to come to a head tomorrow as the Gambling Board meets in Mbizana to hear Sun International’s application.

The king wrote a letter to the board on May 30, in which he stated that the royal family and amaMpondo nation had been excluded in Sun International’s application. He described the hotel group’s own black economic empowerment (BEE) partner as “insignificant.”

Sigcau also added that an amount of R30 000, supposed to have been paid by Sun International into a trust called the Quakeni Trust for the amaMpondo nation, had never materialised.

The board referred Sigcau’s letter to Sun International for comment and informed the king that the hearings were to take place this Tuesday.

In their response, Sun International said as far as it was concerned it had complied with the Gambling Act. It added that it was unclear in which capacity Sigcau and the amaMpondo nation should have been included in the application.

“The objections should be disregarded,” Sun International’s general manager Alex McMath said.

Bax Kaplan attorney Steve Clarke, who represents the king, again wrote to Sun International saying issues that needed to be addressed at the hearing included the lease of the land – already subject to investigation by the Alexander Commission in the early 1990s – and why the R30 000 was never paid into the Quakeni Trust.

He also asked that the payment of rentals and Sun International’s compliance with selling at least 40% of its shares to previously disadvantaged individuals or groups be investigated .

The Wild Coast Sun casino deal was first signed on March 9, 1979, between Sun International and the then homeland government of George Matanzima.

According to a notarial deed at the time, Sun International obtained the land in a R30 000-per-year lease from the Transkei government and Mzamba Development for 50 years.

The deal was mired in controversy over alleged bribes paid by hotel mogul Sol Kerzner to get exclusive gambling rights in the homeland.

The deed was renewed in October 1992 with the option of another 50-year period .

In June 2004, Sun International’s board agreed that all shareholding from the amaMpondo nation should be channelled into a company called the Mbizana Community Company – owned by a trust.

Sigcau’s lawyers, however, said they did not know who the trustees were or to what extent it represented the interests of the amaMpondo nation.

When the king tried to get involved, his lawyers claimed he was sidelined and limited to the Quakeni Trust in 2007, which Sun International undertook to pay R30 000 per year for the benefit of the amaMpondo nation.

The money was never paid – and the Quakeni Trust never registered, Sigcau’s lawyers claimed.

“It’s difficult to imagine how R30 000 per annum can empower and improve the lot of the amaMpondo nation,” Clarke said.

Clarke also expressed concern that the board was not prepared to postpone tomorrow’s hearing to give the king a chance to prepare his presentation.

He said the king also had no involvement with the Mbizana Development Trust and did not know to what extent it represented the interests of the amaMpondo nation or who the trustees were.

Clarke said the king believed the promises which were made when the casino licence was originally applied for had not been kept.

In response to Clarke’s letter, McMath said that in terms of the Gambling Act the king’s concerns should be referred to the board.

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