South Africa’s Sun International, the managers of the Federal Palace Hotel in Lagos, among other business interests in Nigeria, has said that it will exit the country, citing hostile business environment and insecurity, among others, as reasons.
But the Economic and Financial Crimes Commission has disagreed, alleging that Sun International is neck-deep in illegal financial transaction and tax evasion, running into billions of dollars. The Federal Palace and Southern Sun Hotel located in Lagos are being managed by the group.
A reliable source disclosed that the group’s decision to close shop in Nigeria was not unconnected with the recent workers’, owners’ and management’s face-off. “Workers in the country, under the umbrella of Hotel and Allied Workers Union of Nigeria, an affiliate of the Nigeria Labour Congress, had earlier petitioned EFCC, alleging graft and fraudulent business practices against the management of Sun Hotel,” said a top source at the NLC office in Lagos.
EFCC acting Chairman, Ibrahim Magu, in a telephone chat with The Point, confirmed that Sun International was already under the antigraft agency’s scrutiny. “We are investigating Sun International and its investors.
The workers petitioned EFCC, alleging money laundering and fraud there. May be it is because of our work there that they don’t like and want to run away,” Magu said. But Sun’s management insisted that it would be leaving Nigeria due to hostile business environment.
“Sun International, which also reported on Monday a 20 per cent fall in diluted adjusted headline earnings per share to 628 cents for the year to June, said that the FPH had been hit by slow economic growth, low oil prices, threat from Boko Haram insurgents, and a weakening naira.”
Last month, the EFCC launched a probe into Sun International’s initial investment in the Tourist Company of Nigeria, which owns and operates the 5-star Federal Palace Hotel in Lagos.
Sources in the anti-graft agency hinted The Point that “crisis of interests among Nigerian owners of the company and their international partners, bad financial record and money laundering had been major problems in the company for some time now.”
It was also learnt that dwindling profit is driving Sun International, the South Africa-based hotel and gaming group out of Nigeria, thus becoming the latest South African business to indicate interest in leaving Nigeria.
The company’s recent statement said, “The board has decided to exit Nigeria and steps will be taken to achieve this in a manner that does not erode further value. “Continued setbacks in Nigeria as well as the ongoing shareholders’ dispute have frustrated all attempts to develop and improve the property.”
Sun International bought 49 per cent stake in the Nigerian Stock Exchange-listed TCN in 2006, becoming the largest single shareholder, but had in recent years, been drawn into a dispute with its fellow shareholder, the Ibru family. The company’s decision to exit Nigeria followed that of food and clothing retailer, Woolworths and Tiger Brands, which sold its loss-making Nigerian arm to Dangote Industries.
