City hotel liquidated

2013-12-05 00:00

THE owners of the City Royal Hotel intend to appeal this week’s court order placing the hotel under final liquidation.

The order confirming the liquidation of Blue Serenity Investments, trading as the City Royal Hotel, was granted by Acting Judge Piet Bezuidenhout on Tuesday.

Yesterday the hotel in Burger Street was closed to staff and the public and locked down by security firm Superior Security. Around eight guests were evicted and staff were told to leave.

Blue Serenity Investments, under the directorship of KwaZulu-Natal’s former Treasury head and corruption accused, Sipho Shabalala, and his wife, Beatrice, was first placed under provisional liquidation during 2011.

The Assets Forfeiture Unit moved against it during the course of an investigation concerning tenders secured by the KZN Health Department for water purification plants and medical oxygen supplies.

Shabalala and his wife are among the high profile figures charged in the pending case, which has become known as the “amigos trial”.

Yesterday, Sister Keshnee Gounden from Northdale Hospital, who was standing outside the hotel’s entrance, said she had come to pay for a Christmas party that she had booked at the hotel for 40 staff members.

She showed The Witness a receipt for a R3 230 deposit she had paid two weeks ago and wanted to know what would happen to this money.

The provisional liquidator appointed by the high court, who was at the hotel yesterday but who declined to give his name, said the hotel had been placed in final liquidation.

He added that the hotel had been operated for some time by former provincial treasury head Shabalala in his personal capacity, and that anyone owed money by Shabalala must contact him.

The company placed in liquidation, he explained, was Blue Serenity Investments, of which Shabalala and his wife, Beatrice, are directors.

“Staff members are all employed by Shabalala,” the liquidator said.

“Any employment benefits that may be due to employees prior to Shabalala trading the hotel for his own account can be claimed from Blue Serenity.

“The provisional liquidators will assist as far as possible,” he said, and referred queries to the Tshwane Trust at 0861 874 926.

The Witness spoke to the hotel’s chef, Lance Nel, as he was leaving the building. He said that he had started working at the hotel only a month ago.

“I left a secure job with Save’s Nino’s in Victoria Road for this job,” he said.

“I had to first compete in a cook-off with 10 other chefs to get the job. I took the job because Shab [Shabalala] offered me more money than my previous job.”

He said that four other chefs worked in the hotel’s kitchen as well as two staff members who manned the scullery.

“I have a wife and three kids to support,” said Nel. “When we saw the liquidators here last week we were worried about our jobs, but Shab, his wife and their daughter all said, ‘It’s fine, don’t worry, your job is secure’.”

When contacted by The Witness, Shabalala said he had no comment. “It only happened today,” an upset Shabalala said, “Please give us time to grieve.”

Notice of an application for leave to appeal the decision in the high court, was filed yesterday.

The application to liquidate the City Royal was launched by the Development Bank of South Africa, which is owed R12 176 234,44 by Blue Serenity Investments under a loan agreement.

Lukas Ernst, senior legal adviser for the Development Bank of SA, said the City Royal was not financially functional, due to alleged “serious dereliction of the operational and business responsibilities” in relation to the hotel.

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