Sun International, the South African based casino and hospitality group, will soon be able to finally exit the Nigerian market, with news that an investigation into a shareholder dispute at its local property is coming to an end. The problems began in 2006, when Sun International bought a 49% stake in the Nigerian company, Tourist Company of Nigeria (TCN).
The purchase made Sun International the largest shareholder of the company. The venture, however, proved to be troublesome from the start, culminating with disputes by fellow shareholders, the Ibru family, regarding the original deal. Sun International and Nigeria’s Securities Exchange Commission turned to Deloitte to launch an investigation into the dispute.
The casino group said early this week that Deloitte is expected to complete its investigation of the shareholder dispute in the near future. It said that once the investigation has been completed, it will pave the way for Sun International to exit its investment in the Nigerian market.
The board of Tourist Company Nigeria has been reconstituted, and the Securities Exchange Commission has appointed two directors to oversee the company’s operations. TCN owns and operates the 5 star Federal Palace Hotel and Casino, situated in Lagos.
The chief executive officer of Sun International, Anthony Leeming, spoke about the difficulties facing foreign companies seeking to do business in Nigeria.
“The property is sought after given its location so there are potential buyers, but Nigeria has been volatile for a while,” he said. “It’s starts becoming difficult for investors to have confidence.”
Sun International sought to leave Nigeria back in in 2016 already. Some other South African companies such as MTN telecoms operator, have faced problems in the local market.
In the meantime, Sun International reported a 46% decline in half year earnings. This was due to one-off costs and subdued growth its markets.
“We have some positive performances such as Times Square [Casino in Pretoria], with some others not performing well,” said Leeming. “It’s going to be a mixed bag but overall very sluggish growth for the rest of the year.”