Sun king's battle hots up

THE Sunday Times newspaper reported that Sol Kerzner intends to sue the company he helped create, Kersaf Investments for around $75m (about R675m) and has accused it of fraudulent conduct. Kerzner's group, Sun International Hotels Limited (SIHL) operates casinos and resorts in the Bahamas, Indian Ocean and Dubai and derives income from the Mohegan Sun in Connecticut. The Kersaf Group consists of a complex bundling of leisure investments, including a majority share holding in Sun International's properties in southern Africa, but also in Kerzner's SIHL. Earlier this year, an agreement was struck between Kersaf and SIHL in which Kersaf agreed to restructure its 21,4% effective interest in SIHL. Kersaf also paid SIHL for the worldwide rights to the Sun International brand, and would be released from its restraint of trade obligations, which required it to limit its participation in the gaming and resort industry outside of southern Africa. It would only be released of these obligations in June next year, or if it disposed of two million SIHL shares. According to the Sunday Times, SIHL has alleged in its papers submitted to the court, that Kersaf is guilty of "wanton, malicious and tortious interference with prospective business relations and unjust enrichment". It says Kersaf and its affiliates have disregarded a settlement agreement that it would not engage in business outside of mainland Africa. It said no sooner had the ink dried on agreements reached in July than Kersaf breached them "by engaging in impermissible activities in Greece, Mauritius, Dubai and very likely in other locations as well". Kersaf's legal inhouse representative Hendrik Brand told TNN that he was confident that Kersaf could defend itself against each of SIHL's accusations, and that the company would need to overlook all the relevant paperwork before making a comprehensive statement. Kersaf has 30 days in which to respond to the summons issued them by a New York Court. Kerzner's legal action against Kersaf comes at a time when several Caribbean and Middle Eastern hotels are experiencing low occupancies in the wake of the September 11 attacks on New York. (Miguel de Sousa)