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South African Casino Shareholders in Trouble

22 April 2004

SOUTH AFRICA – As reported by the South Africa Sunday Times: "Black economic empowerment (BEE) shareholders in the R250million (US$36.5 million) Hemingways Casino are in financial trouble after a leading bank called up its loans.

"Eastern Cape Gambling and Betting Board chairman Joseph Lukwago- Mugerwa said Absa may attach the 20 percent of gaming giant Tsogo Sun's shares that are presently held by the two Eastern Cape based empowerment consortiums, Efusini Consortium and Suvuka – 'if they (the bank) have not already done so'.

"The two minority shareholders have failed to pay the bank between R1.5m (US$219,156) and R2m (US$292,201) in interest on the loans which are understood to total between R20m (US$2.9 million) and R30m (US$4.38 million).

"…Economic Affairs MEC Enoch Godongwana, backed by the gambling board, stated categorically that he would not allow the minority shareholding to be taken away from black empowerment groups.

"…The irony of the present situation in which the minority shareholders find themselves is that Hemingways is currently showing a profit and is expected to soon pay dividends…"

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