Rea­sons for sale of Sentrim port­fo­lio un­clear

Owner has said lit­tle about why he’s leav­ing an in­dus­try many rich peo­ple are eager to en­ter

Daily Nation (Kenya) - - NATIONAL NEWS - BY BRIAN WASUNA

bwa­suna@ke.na­tion­media.com

In re­cent times, few events have sent shock waves through the hospi­tal­ity in­dus­try that can match an an­nounce­ment by busi­ness mogul Jagdesh Pa­tel last month that he is sell­ing his ho­tel port­fo­lio, which boasts eight lux­u­ri­ous es­tab­lish­ments across the coun­try.

The ty­coon and his busi­ness as­so­ci­ates re­main tight-lipped about their rea­son for ex­it­ing a door that sev­eral su­per rich in­di­vid­u­als are fight­ing to go through. Sentrim has hired Uk-owned prop­erty man­ager Knight Frank to over­see the land­mark sale that is likely to at­tract nu­mer­ous of­fers.

In the en­vi­able hospi­tal­ity port­fo­lio are 680 Ho­tel, Ho­tel Boule­vard, Cas­tle Royal Mom­basa, Sentrim Ele­men­taita, Sentrim Am­boseli, Sentrim Mara, and Sentrim Sam­buru.

Al­though Sentrim and Knight Frank have played their cards very close to their chests re­gard­ing the port­fo­lio’s own­er­ship and sale, the has un­cov­ered fresh de­tails, pre­vi­ously a pre­serve of very few of Mr Pa­tel’s fam­ily and friends.

The 680 Ho­tel, which got its name from the num­ber of beds it had when its doors opened, is the big­gest mon­ey­maker for the group, rak­ing in Sh213 mil­lion an­nu­ally. Its av­er­age gross profit for the ho­tel unit alone has been Sh59.6 mil­lion for the last five years.

Knight Frank holds that profit from 680 Ho­tel can ei­ther be max­imised ei­ther by ren­o­vat­ing the build­ing into an of­fice block, or let­ting the three-star ho­tel con­tinue its good run.

Sentrim Ele­men­taita has been rak­ing in Sh151 mil­lion an­nu­ally in the last three years, with an av­er­age gross profit of Sh68.6 mil­lion.

Other an­nual in­comes men­tioned in the doc­u­ments are: oyal Cas­tle Mom­basa (Sh97.4 mil­lion, with a gross profit of Sh68.6), Sentrim Mara (Sh84.4 mil­lion, with a gross profit of Sh57.3), and Sentrim Tsavo (Sh40.2 mil­lion, with a gross profit of Sh25.6 mil­lion).

In­side the Sentrim group is a com­pli­cated own­er­ship web that has buried the in­di­vid­ual own­ers’ iden­ti­ties is sev­eral lay­ers of lo­cal and off­shore trusts and com­pa­nies.

Doc­u­ments sent to po­ten­tial buy­ers only re­veal three in­di­vid­u­als as mi­nor­ity share­hold­ers, with com­pa­nies as ma­jor­ity share­hold­ers. Mr Pa­tel, Mr Ra­jnikant M. Shah and Mr Harji V. Hi­rani each own a share in lo­cal com­pa­nies that own ho­tels in the Sentrim group.

The Nairobi-reg­is­tered firms, May­house Ltd (680), Chezer In­vest­ments (Boule­vard), New­gate Man­age­ment Ltd (Cas­tle Royal Mom­basa) and Op­er­a­tion Cas­tle (Sentrim Ele­men­taita) own the

build­ings and land on which they sit.

Mr Pa­tel, Mr Shah and Mr Hi­rani own one share in May­house, Chezer, New­gate and Op­er­a­tion Cas­tle while their off­shore com­pa­nies own the other 128,000 shares.

The four lo­cal com­pa­nies are, in turn, ma­jor­ity-owned by four com­pa­nies reg­is­tered in the Bri­tish Vir­gin Is­lands and Mau­ri­tius.

The Bri­tish Vir­gin Is­lands firm, Min­tea Cor­po­ra­tion Ltd, owns 997 shares in May­house and, by ex­ten­sion, the 680 Ho­tel. Gartinero Com­pany Ltd owns 124,997 shares in Chezer In­vest­ments and by ex­ten­sion, the Boule­vard Ho­tel.

The Panama pa­pers in­di­cate that Mr Pa­tel, Mr Shah and Mr Hi­rani have shares in Min­tea and Gartinero, along­side three trusts with al­most sim­i­lar names.

Matco Ltd, as Trus­tees of the 1306 Trust, Matco Ltd as Trus­tees of the 2904 Trust, and Matco Ltd as Trus­tees of the 3006 Trust are share­hold­ers in both Gartinero and Min­tea.

Min­tea is also co-owned by a shad­owy trust — the Lom­bard Trust — whose coun­try of reg­is­tra­tion is not in­di­cated in the Panama pa­pers.

Mau­ri­tius-reg­is­tered Sim­ply Green Com­pany Ltd has 997 shares in New­gate Man­age­ment, which owns Cas­tle Royal in Mom­basa. Kenya Wind Com­pany Ltd, an­other firm reg­is­tered in Mau­ri­tius, has 997 shares in Op­er­a­tion Cas­tle, which owns Sentrim Ele­men­taita.

Ger­man news­pa­per

in 2016 named Min­tea and Gartinero among 214,000 firms reg­is­tered off­shore by wealthy in­di­vid­u­als look­ing to hide their wealth, avoid heavy tax li­a­bil­i­ties in their home coun­tries, and in some in­stances, even laun­der the pro­ceeds from crime.

How­ever, the has not found any ev­i­dence that Sentrim’s off­shore deal­ings are in any way il­le­gal.

The Sh5.2 bil­lion Knight Frank an­nounced as a guid­ing price seemed rather con­ser­va­tive, but the con­sul­tancy’s head of agency, Mr An­thony Have­lock, says it is in­tended to at­tract se­ri­ous buy­ers, who will bat­tle it out at the auc­tion.

He said the sale of­fer has at­tracted in­ter­est from both lo­cal and for­eign in­vestors, but gave no de­tails. Also, he gave no time frame for when the sale will be com­pleted.

Six­eighty Ho­tel in Nairobi is the Sentrim Groups big­gest mon­ey­make, rak­ing in Sh213 mil­lion an­nu­ally.

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