Court orders Plantation Club hotel wound up |24 June 2008

In his ruling, acting chief justice Ranjan Perera noted that Ailee Development Corporation (ADC) – in which government is a shareholder – owes US $130 million, yet the company’s assets are worth only US $40 million.

The petition for the winding up of ADC was filed by government in its capacity as a shareholder of the company.

“The court is satisfied that at the time of presentation of the petition there was no reasonable hope that the company could pursue its main objective as a hotelier, not merely due to the licence not being renewed by the Seychelles Licensing Authority (SLA) but mainly due to its inability to find partners or investors who would invest in confidence knowing the debt situation of the company,” the judge said in his ruling.

“Hence the court does not agree it is a temporary setback.”

Judge Perera said in his 37-page judgment that the company has been in quagmire since its inception and its operations are now practically impossible.

“The principal creditors are tied down by the deferment agreement. The interest on the loans is mounting, with the company having no hope of settling them even if they sell the assets,” he added.

“Therefore the court holds that the substratum of the company has disappeared and that in these circumstances it is just and equitable to wind up the ADC, and the court so orders.”

During the hearing of the case, the judge visited the hotel and saw defects the Seychelles Tourism Board (STB) was complaining about and heard that the hotel was unable to meet the requirements of both the SLA and the STB, leading to the non-renewal of the hotel’s licence after December 2007 as the company had earlier been warned would happen if it did not comply.

Judge Perera ordered that Gerald Lincoln “who was provisional liquidator shall continue to be liquidator of the company”.

The government was represented by deputy attorney general Ronny Govinden, the company by Bernard Georges and the Bank of Baroda Consortium as creditor by Kieran Shah.