Small investors waiting as KZN hotel opening nears
● Oceans — the multibillion-rand Umhlanga hotel and mall devel opment with ties to businessman Vivian Reddy, pictured below, and once the target of the construction mafia — is set to open a five-star Raddison Blu hotel in May amid claims by some shareholders that they’ve been kept in the dark about their investments.
Reddy, a co-developer, introduced an investment opportunity in 2017 for all sectors of society to have a slice of the world-renowned brand, from high-end investors to low-income earners. Shares were launched at R20 each and prospective buyers had to buy a minimum of 50 shares for R1,000.
Reddy bought R10,000 worth of shares for each of his two domestic workers.
Now, as the R650m hotel is set to open, some shareholders are crying foul, claiming they are yet to receive their share certificates and have not heard a word since buying the shares five years ago.
But Brian Mpono, Ocean s’ group corporate affairs executive, says it’s simply a case of miscommunication and the development has steamed ahead despite several challenges, including the pandemic.
It stalled in 2018, a year after it kicked off, due to legal wrangling over money, but eventually resumed after Reddy agreed to pay construction firm WBHO an outstanding R35m.
In the same year, protesters stormed the site of the development in Lagoon Drive in the plush beachfront precinct, claiming it was not aimed at empowering black people. Reddy denied this, saying it was BEE compliant.
Thulani Msomi, a public servant from Umlazi who bought R4,500 worth of shares in 2017, told the Sunday Times this week he felt as though he had been “scammed”.
“There has been no communication whatsoever. All I have is a share number.
“I even want to get rid of these shares; we feel like we have been scammed.”
After Msomi complained on the Radisson Blu Umhlanga Facebook page, he received notice of an annual general meeting scheduled for later this month.
Blessing Ntombela, a finance department employee from Kloof, was studying business management when he bought 50 shares in 2017.
“Since 2017 I haven’t heard anything. I have never been invited to any shareholder meeting. I wanted to have something for myself long-term and thought it was a good idea. The masses have been ignored. It’s very frustrating.”
Another shareholder, Vusi Ngidi from Pietermaritzburg, spent R12,000 as an investment for his children’s future.
“It took very long for me to receive a share certificate. After that there was silence.”
Ngidi drove to Umhlanga last weekend to check whether the hotel was real.
“I invested my money and trust in this project. I had never had an investment before and I thought this would be a great opportunity. I feel very disappointed. But I do understand that Covid has delayed things a lot. I hope my investment pays off eventually,” he said.
Mpono said that with 23,000 shareholders on their share register “it is not abnormal to receive a few queries relating to lack of information and we respond to them individually”.
“In most cases non-receipt is due to email issues or change of information we are not informed about,” he said.
“Annual general meeting notices are sent to all shareholders via e-mail, post and sms, using the information on file.”