Gambling group loses court battle against Ithuba

Gambling and hoteling group Hoskens Consolidated Investments (HCI) has lost a court battle it had brought against national lottery operator Ithuba.

HCI Invest and HCI Treasury had hauled Ithuba and Zamani Marketing and Management Consultants, among others, to the South Gauteng High Court in an attempt to interdict Ithuba from paying salaries of employees of Ithuba, Zamani or any other entity in the Zamani group. Zamani, which forms part of a consortium of companies that won the lottery licence, manages Ithuba and pays staff salaries.

HCI sought an order directing Ithuba to pay its monthly management fee to the attorney Webber Wentzel to hold the money in a trust.

HCI also sought to interdict Ithuba from paying the salaries of employees of Ithuba, Zamani or any other entity in the Zamani group. The management contract between Zamani and Ithuba, according to the court document, dates back November 1 2013.

Judge J Unterhalter ruled: “The interdicts sought by HCI must be dismissed. The salary relief is not required, and a case has not been made for the fee relief.

“HCI sought relief against Ithuba and Zamani. Their opposition has prevailed, and these respondents are entitled to their costs. Given the complexity of the matter, Ithuba and Zamani were justified in their employment of two counsel, and the costs of two counsel are warranted, where two counsel were utilised. The application is dismissed. The (HCI shall pay the costs of Ithuba and Zamani), including the costs of two counsel, where two counsel were utilised.”

According to the court papers, HCI provided funding to Ithuba when the company needed funds to run the national lottery.

When it became party to the management agreement, HCI acquired a step-in right to oversee the management of the business of Zamani and Ithuba upon the occurrence of a trigger event.

“Upon the trigger of the the step-in right and the exercise of the right, HCI’s invest is entitled to a fee equivalent to 1% of Ithuba’s gross monthly revenue,” read the court papers.


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