Govt evicts investors, closes down business

G

overnment has evicted two South African and a Malawian investor and closed down a lakeshore hospitality business thgey have been operating for over four years in Mangochi, citing security risk.

The investors, Warren Loots with a shareholding of 35 percent and Francis Lloyd Du Plessis (25 percent), co-owned Monkey Bay Beach Lodge (MBBL) with a Malawian partner Joseph Mponda who had a 40 percent majority stake and had been operating from a leased house belonging to Malawi Lake Services (MLS).

MLS is a State-owned entity under the management of Ministry of Transport and Public Works that runs water transport services on Lake Malawi and is headquartered at Monkey Bay in Mangochi.

In December 2011, MLS signed a tenancy agreement with Mponda and late Mr. Nangazi to operate the facility before Loots, Du Plessis and the former registered a partnership in August 2017.

The facility is in Monkey Bay on Plot Number S2 located between Malawi Fisheries and Malawi Defence Force’s (MDF) Maritine Forces Headquarters on an estimated two-acre piece of land.

However, according to Loots, conflict over tenancy issues began after they uplifted the facility turning, it into a ‘world-class’ resort.

In its letter signed by Mary Shawa for Secretary for Transport and Public Works and addressed to Mponda and Nangazi, the ministry claimed the two had breached the lease agreement by sub-leasing the house to foreign investors when they knew the house was situated within government’s security premises.

The ministry gave MBBL up to June 29 2018 to vacate the premises but this fell through after the lodge owners obtained a permanent injunction from the High Court Lilongwe registry allowing them to continue operating the facility.

In November 2019, the ministry surrendered ownership of the house to MDF and MLS issued a second termination notification to MBBL which was blocked  in January 2020 after the court upheld an earlier injunction that again allowed them to continue operations.

“But in February 2020, Major General Francis Kakhuta Banda [Maritime Forces Commander] issued an order preventing all visitors to access the lodge even though there was a valid court injunction. This clearly put MDF in contempt of court,” explained Loots in an interview.

He claimed that in June 2020, MBBL management agreed to vacate the premises following a meeting with MDF head of legal services Brigadier General Dan Kuwali. The two parties further agreed that the State security agency would compensate the lodge for terminating the lease and for the improvements made on the property.

The row took another twist on November 18 2021 when MBBL directors received a phone invitation to a meeting with the Attorney General (AG) Thabo Chakaka Nyirenda and other high-ranking military officers where they were told the lease agreement was null and void as it had no stamp duties.

The following day, Loots said, they were surprised to notice the government’s chief legal adviser issuing them a fresh eviction order, followed on January 4 by soldiers raiding the facility and evicting staff working and living there.

“Items were left strewn across the lawn and people, including school boys were left homeless. There was looting while MDF stood by and watched.

Loots argued that if stamp duties were required, then penalties dating back 10 years when the lease was signed should apply. But he contended their agreement was a tenancy and not a lease agreement which does not require stamp duties.

Nyirenda said: “When people have got problems they go to court and not to newspapers. So let them go to court and complain then the case will be defended there.”

The managing director claims following the eviction they have lost over K100 million in revenue as well as investment made on the property.

Mponda confirmed entering into a lease agreement with MLS but confessed “as partners, we also made mistakes, resulting in all this mess.”