Justin Arenstein
The Dolphin Group has closed its South African head office and is fighting to save two of its local flagship hotels after mismanagement plunged the leisure group into financial crisis.
Dolphin officials confirmed that the Dubai-based corporation retrenched its head office staff in January after failing to pay rent at its plush Sandton Square offices for three months.
Dolphin’s primary tourist company, Block Hotels, is also radically downsizing its South African operations after the exclusive Rivonia Inn in Johannesburg and Promenade hotel in Nelspruit were attached by creditors.
The company made a swashbuckling entry on to the South African tourism market in 1996, when it pledged more than R50-billion to the Mpumalanga Parks Board for a 50-year exclusive contract to commercialise the province’s game parks.
The deal, which was secretly concluded without tender approval and in violation of the land rights of affected rural communities, was declared void by the government and led to the arrest of the Mpumalanga Parks Board CEO Alan Gray and three others on 77 theft and fraud charges.
Block’s South African operations director Judd Lehmann said the group had been forced to restructure after facing demands for more than R8-million on the two flagship hotels.
Lehmann said he was only able to stave off Liberty Life’s threatened attachment of the Promenade hotel at the last minute by offering R6-million shares in Dolphin’s Mauritius-listed Delphus Bank to offset debt of about R4,5-million.
He was, however, unable to halt the auctioning of Block’s historic Rivonia Inn last month. The small luxury hotel was attached by Nedcor Investment Bank in March after Block repeatedly failed to pay its R54000 a month bond and ran up an overdraft of about R4-million.
Block’s last-minute court appeal to freeze the auction failed, but no one turned up for the sale and Nedcor was forced to buy the property for a paltry R100 000. Nedcor has declined to comment on the issue, but confirmed it has since identified a potential buyer and is negotiating a R5,7-million deal.
“We’re very unhappy with the way this whole issue has been handled and have briefed attorneys to try and get a court injunction or get the auction overturned. We would like to settle the debt or sell off the property ourselves,” said Lehmann.
He insisted that Dolphin and Block are financially sound and blamed the crisis on the group’s former British-based operations director, Mike Sharpe. “The problems are the result of hopeless mismanagement. Sharpe was based in London and very seldom actually came out here to inspect the business.” Sharpe was not available for comment.
Stressing that Dolphin is not pulling out of South Africa, Lehmann said the group is instead designing a “rescue package” for its remaining hotels. He said Block Hotels (Pty) Ltd is now the primary vehicle for Dolphin in South Africa, while Promenade Hotel Investments and the United Touring Company are both still active. African Eye News Service