A Mombasa-based hotelier has petitioned the High Court to wind up the PrideInn Group of Hotels over a Sh87 million debt which is linked to a lease row.
Businessman Salim Sultan Moloo, owner of Tropicana Hotels Limited, says in court papers that he leased his Eden Rock Hotel in Malindi to PrideInn Hotels in 2011, but claims the new tenants unilaterally cancelled the contract.
The debt was to be paid in installments by way of postdated cheques, but Mr Moloo, in an affidavit filed in court, says PrideInn Hotels began defaulting on the payments in 2012 and is yet to settle the sum.
The debt stood at Sh69.35 million as at May 2016, but carried an interest rate of 26 per cent per annum.
“More than four years have passed since the undertaking to pay the debt was given by the company to the petitioner and more than three months have passed since the statutory demand was issued and received but the company has failed to satisfy the whole debt or part thereof,” says Mr Moloo in court papers.
“The petitioner therefore humbly prays that the company, PrideInn Hotels & Investments Ltd be wound up by the court.”
The matter is now scheduled to be heard on June 12.
PrideInn Hotels, which operates a chain of seven hotels in Nairobi and Mombasa, is jointly owned by Mohamed Shabir Mohamed Kassam who serves as chairman, and Hasnain Shabir Noorany who is the chief executive.
The duo acted as guarantors of the debt, according to the court filings. Part of the debt is linked to renovation costs incurred by Mr Moloo to refurbish the building to fit PrideInn’s standards when he entered into the lease agreement.
PrideInn, the court papers show, has drawn several postdated cheques towards paying the debt, with the first being due in May 2012. However, the cheque due in July 2012 was presented to the bank but not paid on PrideInn’s request, Mr Moloo told the court.
“The petitioner did not present the cheque due in August 2012 or any other subsequent cheque. The debt continued and continues to accrue interest,” he said in the affidavit.