Businessmen Romeo Kumalo and Happy Ntshingila’s company has applied for the liquidation of Akani Properties after accusing it of failing to meet its financial obligations.
The liquidation was lodged at the Joburg high court by Kumalo and Ntshingila’s entity, Washrika 3 Oaks (Pty Ltd).
The liquidation application is a green fly in Akani’s jar of milk, as it comes after the black-owned entity’s much-publicised announcement that it has invested R500-million in the construction of a mall in Zeerust, North-West, a fortnight ago.
The accompany also acquired a R1.1-billion mall in Nicoleway, north of Joburg, the Glen Village Mall, in Pretoria.
In the court papers which we have seen, the Washrika said it had entered into what it called “Standard-Form JBCC Principal Building Agreement” with Akani between October and November 2020 to refurbish and renovate the existing conference centre, boutique hotel, and the spa and wellness centre at the Radisson, Kempton Park, for a tender amount of more than R45-million.
In terms of the contract, said Washrika, the amount was supposed to be paid in interim payments described in the interim payment certificate issued by the Bentel Associates International (BAI) within seven calendar days of the date of issue of such a certificate.
Wing of Akani Retirement Fund
The contract , said Washrika, also stipulates that a final payment certificate shall be issued by BAI, certifying 100% of the amount of the final account.
Washrika said since the commencement of the contract, Akani, which is wing of Akani Retirement Fund, only made payments between December 28, 2020, and November 8, 2021.It then stopped making payments without the advancement of any apparent reason .
This, the entity said, includes over R4-million whose payment certificate was issued on December 6, 2021, more than R2.2-million for payment certificate issued on February 25 last year and over
R76 234.80 of the final payment certificate issued on March 25, 2022.
“The respondent is therefore indebted to the applicant in the total amount of R6 410 372.61 (six million four hundred and ten thousand three hundred and seventy-two rand and sixty-one cents). The respondent’s failure to make payment of the aforementioned constitutes a material breach of the contract,” read the papers.
Washrika further said after the breach, its lawyers addressed a letter of demand to Akani, which is owned by businessman Zamani Letjani, on Janaury 14 last year, asking it to pay the outstanding amount within 10 working days.
When Akani failed to remit payment, said Washrika, it terminated the contract on March 22 last year.
The entity said it addressed another letter to Akani on May 16 last year demanding payments of the amount certified by no later than May 20.
Threat of liquidation
Washrika said it threatened to apply for Akani’s liquidation in terms of the Companies Act if it failed to do so.
“Notwithstanding service of the aforesaid, the respondent has, to date, failed to raise bonafide defence to the applicant’s claims for payment, make payment of the outstanding amounts for which the respondent is indebted to the applicant or secure or compound the outstanding amounts for which the respondent is indebted to the applicant, to the applicant’s reasonable satisfaction,” read the papers.
Washrika further said it did not hold any security for its claim against Akani, which is, according to it, clearly failing to meet its financial obligations.
“It is the applicant’s submission that the respondent should therefore be wound up in terms of the… Companies Act… and there shall be a benefit to the respondent’s creditors if it is wound up,” read the papers.
Akani said it will challenge Washrika ‘s suit in court.
“ W3O were contracted by Akani Properties to renovate the Destiny Boutique Hotel in Kempton Park. Destiny Hotel is one of Akani Properties’ hospitality assets. Upon completion of the renovation project, Akani Properties commissioned two independent consultants to conduct a thorough assessment of the renovation project before payment and handover to the landlord. This is standard practice in the construction industry. As a result, two comprehensive reports were produced that showed poor workmanship on part of W30.
To this end, they were requested to complete the project and fix the identified defects but to no avail. They instead opted for the arbitration process. We are currently in the process of exchanging documentation as part of the arbitration hearing. Furthermore, the liquidation application will be vehemently defended by Akani Properties as we believe it is baseless and has no standing in law as the business is solvent,” said the company.