The Tower Hotel on Main Street which shut down earlier this year has been sold to a Canadian company for US$8M but its new owners will in no way take over the responsibility of paying workers still owed by the previous owners.
“This is a done deal we just have to get through the baby steps to get the deal done,” Mike Mosgrove of Panther Corp Canada told a press conference this morning.
He stated that the sale agreement was signed two days ago between himself and the majority share owner of the hotel. While he refused to name who the majority shareholder was, Stabroek News understands that it is West Demerara businessman Salim Azeez.
Mosgrove informed that the new owner now resides in the United States.
He said that in addition to the iconic Main Street property, the 200 acres Emerald Tower Resort, located on the Soeskdye Highway, was also a part of the sales agreement.
The Hotel’s new owner made it clear that the company will not be responsible for any liabilities of the hotel and debts incurred by the old owners would have to be settled by them. However he said that since the Tower deal should be closed in another month, he saw no reason why the old owners should not meet their obligations as they would have “more than enough money” to do so.
Among its debts, 67 workers of Tower are owed a total of $5,577,633 in wages, salaries and other benefits. They were promised payments several times by Azeez who has to date not given any commitments.
This caused the Ministry of Labour to intervene on behalf of former employees. Chief Labour Officer Charles Ogle then said that Azeez had pledged his commitment to paying the former although he had given no timeframe for when this would be done.
Ogle said that at the recent meeting with the ministry, Azeez explained that the hotel was facing a financial crisis and did not have a buyer as yet and as a result could not pay the former workers. He said that Azeez asked for “more time” and that the ministry gave in to the request although he would not say how much time has been given.
On May 23rd this year, the hotel abruptly closed. Workers protested after they were told through an anonymous phone call that letters were at the front counter for them. They said when they collected their letters, they learned that that day was the last day of work for them as the hotel was closing. They continued their protests in the days that followed.
The hotel then released a statement on May 27 in which it explained its abrupt closure, while saying that business had declined dramatically in recent times. It assured that assets would be liquidated to pay outstanding amounts to its employees.
On June 11th, Azeez had met with officials from the ministry and explained that the hotel had a buyer but that the buyer wasn’t assuming legacy costs and did not want the employees that had been on staff. He said that he would pay workers off from an initial payment given to the company by the new buyer to pay off all expenses.
The hotel, however, reneged on that promise. Azeez’s legal counsel, Marcel Bobb, told the workers that the hotel’s first obligation was to the bank, the Guyana Revenue Authority and the Guyana Power and Light Inc.
