April 4 2010: Bank Gaborone has threatened to apply to the high court for the winding up of Tourism Development Consortium should the company fail to settle its P15 million debt in three weeks.
Tourism Development Consortium, whose main shareholder is the late Louis Nchindo, has sold more than P100 million worth of subdivided plots at the controversial piece of land at Gaborone Block 10.
Lawyers acting for Bank Gaborone, Collins Legal Consultants, informed Tourism Development Consortium that Nchindo owed the bank P15 099 700.
A letter dated 26th February 2010 signed by Peter Collins states, “As you are aware, on 4 September 2008 Tourism Development Consortium (Pty) Ltd bound itself as surety and co-principal debtor insolidium to the repayment by Nchindo of the indebtedness. In so doing it renounced the benefit of the usual legal exceptions including the beneficium ordinis seu execussionisi et divisionis.”
The letter further states, “In the circumstances the indebtedness is due by your company and the bank is exempted from having to excuse the principal debtor, Nchindo, before demanding payment from you. This letter accordingly constitutes a demand requiring your company to pay the said sum forthwith.”
Advocate Collins warned that should the company fail to pay in three weeks following the date of demand, “Your company will be deemed to be unable to pay its debts and liable to be wound up by court in terms of section 369 (b) of the Act. My client reserves the right to petition the court for this relief, if necessary.”
The loan from Bank Gaborone followed a decision by Stanbic bank to withdraw its loan to Tourism Development Consortium after government stalled the sale agreement of the land.
Documents in the possession of The Sunday Standard indicate that the decision by the government “caused significant problems for the TDC and its main shareholder, Mr. Nchindo”.
The project financier, Stanbic Bank, who were worried about the future of the project, refused to release the loan money.
TDC three years ago concluded a number of multimillion Pula agreements in relation to the development of the controversial plot, including heads of agreements with Legacy Limited (a listed South African company, involved with up market hotels and developments.”)
TDC also entered into agreements with a number of companies and consultants for the construction and installation of services and infrastructure, and sale agreements for residential and commercial properties.
TDC had also concluded a financing agreement with Stanbic Bank for P74 million, for which Nchindo stood as personal surety. A considerable amount of infrastructural work has already been carried out of the property (including the laying and tarring of roads, and the construction of storm water drains for which the contractors are demanding payment.)
It is, however, understood that Stanbic became nervous about the future of the development and refused to release payment to the civil contractor on site.
The nervousness on the part of financiers was a result of the decision by the Director of Public Prosecutions, assisted by DCEC (Directorate on Corruption and Economic Crime) to charge Louis Nchindo and his company.