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What was once a luxury Sol Kerzner resort in the Eastern Cape has been looted and stripped, allegedly by disgruntled community members.
“The site has been subjected to successive burglaries over the past few months, with an escalation over the past few days,” says Mary Brennan, CEO of MahalaX, the company formerly leasing the resort from Prudhoe Community Development Trust.
MahalaX took occupation of the Fish River Resort site on 1 April 2022 with plans to develop it into the country’s premier film location.
Within a few days, it was visited by a group of people claiming they were the rightful owners of the site. However, this had been settled in favour of the Prudhoe Community Development Trust by the Land Claims Court after a highly contested 22-year land claims process. The Department of Agriculture, Land Reform and Rural Development had spent R84 million maintaining the site over a period of four years before it was handed to the community trust.
The visits from the group intensified over the succeeding months, with protesters blocking the resort entrance and intimidating staff while demanding jobs and perks and challenging the trust.
In August 2022 the group took control of the premises and demanded the evacuation of the staff and 48 members of a British film crew in producing a reality show. The British film crew was ultimately evicted from the premises by the group.
In August 2022, MahalaX brought an urgent application before the Eastern Cape High Court and won an interdict preventing the group from interfering in the business. They were also interdicted from entering the premises and from intimidating, harassing, insulting, threatening, or assaulting MahalaX managers and staff.
Despite company meetings with the group to address their demands, the visits continued and became more aggressive.
“We’ve had stand-off after stand-off with the community members, and eventually got the premier’s office involved. We are dealing here with five or six gangsters essentially extorting us,” says MahalaX co-founder Sonny Fisher.
“It’s terribly sad, but we have had to walk away. We were unable to find any short-term funders willing to back the project, which is understandable, given the circumstances that led up to this,” Fisher adds.
Film project opportunities lost
The collapse of the project means the potential loss of hundreds of millions of rands in revenue, adds Brennan.
“We had already started generating revenue. We were busy hosting an international reality show that needed to be evacuated from the site when the hostile group took over [the site] and demanded that we leave. The police said there was nothing they could do as the men claimed they owned the site until such time that the interdict was obtained. Subsequently, the premier’s office has also attempted to resolve the situation. We had several more projects lined up, but all of that is gone,” Brennan says.
“This is tragic, as we had created jobs for the local community and were well on our way to creating what would easily have become SA’s premier film location,” she says.
“Given the material cost of disruption to operations, and the hostile and violent nature of the event, all operations ceased and significant losses were incurred,” says Brennan.
“MahalaX was not in a position to refinance or re-establish operations until such time as the court interdict was made permanent [in November 2023] and it was clear that the social cohesion issues affecting the Prudhoe Community were resolved.”
Lease terminated
A unique feature of the MahalaX business model was its use of digital technologies such as crypto-based tokens as a way to connect investors and entrepreneurs.
“I spent six months in Ethiopia to develop similar projects there,” says Fisher.“The difference is in Ethiopia, though it is poor, the community works together with the government, and there is virtually no crime. We need the same kind of social cohesion in this country before we can make projects like this succeed.”
Fish River was originally developed as a casino, hotel and golf course resort by the late Sol Kerzner, but the casino licence was eventually transferred to Boardwalk Hotel in Port Elizabeth in 1999. Without the casino licence, the resort could not survive on tourism and golf alone and was the subject of a protracted and acrimonious land claims dispute, with the site eventually being awarded to the Prudhoe Community Development Trust.
MahalaX was granted a lease to operate the site, but that lease has now been terminated, and alternative options are reportedly under consideration by the trust.
This story first appeared in Moneyweb.
