Dr Mahtani’s Finsbury Investments took possession of Hotellier Limited’s Radisson Blu Hotel this year following a Lusaka High Court judgment that sustained the hotel owners’ US$40 million indebtedness to Finance Bank Zambia Limited.
The takeover, however, sparked speculation and accusations on Dr Mahtani.
But in an interview, Dr Rajan Mahtani explained that the takeover was clean and was done through a legal battle with its previous owners.
“The public need to know the truth. We fought the battle through a due process, through the courts of law. There was nothing sinister. We succeeded in proving that all the allegations that were made against us were false and documents [to show this] are in court, some of them already came out in the public domain,” he said.
The High Court on May 7, delivered a judgment where Hotellier Limited was found liable to pay compound interest to Finance Bank at its overdraft rate for money that Hotellier had borrowed towards construction of the hotel.
This was in a matter where Finance Bank and Finsbury Investments as plaintiffs sued Ody’s Works Limited, Odysseas Mandenakis Jr, Odysseas Mandenakis senior and Hotellier Limited as defendants for the monies they obtained from the bank to construct the Radisson Blu Hotel.
Dr Mahtani said, “The total debts that were incurred [now] amount to roughly US$62 million; there aren’t sufficient assets.”
“...but we have decided to step in to safeguard employment, to safeguard competition and the management contract which we have with Radison Blu will continue and we will look to further develop the area with expansion programe,” he said.
“There are no negative changes [such as downsizing the workforce]. In fact, changes will be for the better like further increasing employment because of our desire to expand.”
Meanwhile, Dr Mahtani said Zambia had established itself on the international market as a haven for investment and for doing business because of its strong judiciary and democracy.
“It is a place where democracy prevails and where there is a good and strong judiciary,” he said.
“A lot of international players look to those yardsticks when they invest funds.”
Asked if there were any immediate threats to sustain the gains Zambia had made as a safe haven for investment, Dr Mahtani said, “Unfortunately, instead of Zambians concentrating on something more important to the economy, we tend to spend more time on the politics and that is what is a threat to the international [players].”
“They look for stability [and yes] we are stable but if we could concentrate more of our time in building the economy and building a better Zambia for Zambians, we will find the achievements sustained a little longer,” he said.
On Finance Bank, he said the bank had continued to be resilient and profitable.
“The bank has performed very well. If you look at our financial results, they are outstanding,” he said.
The bank, which Rupiah Banda’s administration briefly wrestled away from Mahtani, announced that its deposit base, which is an important measure of performance, had grown from K1.009 billion as at October 2011 to K2.048 billion as at March 31, 2014.
Dr Mahtani said the bank was going ahead with its planned listing on Lusaka Stock Exchange this year.
“The listing will be before 31st December and we are also listing on the Johannesburg [bourse],” he said.
“Our expansion plans are also on. We are opening in Malawi in the next six weeks with three branches. Our head office will be in Lilogwe.”