We are vindicated — Blue Rose Ltd
THE Founder and Managing Director of Blue Rose Ltd, a Ghanaian Real Estate company, Eric Ebo Acquah, says the ruling of the High Court in Accra ordering Shelter Afrique to pay GH¢500,000 damages for breach of contract and GH¢100,000 costs to his company, vindicated its stand as a credible institution.
“The ruling, which stretches across 43 pages, has offered vindication after years of silence, stress and lost opportunities.
“It took seven years for the court to rule,” Mr Acquah stated in his first public reaction after the high court ruling in favour of his company.
Court ruling
In a judgment delivered by Justice Samuel Djanie Kotey, the court was of the opinion that the failure of Shelter Afrique to disburse the over U$5.2 million to the plaintiff, Blue Rose Ltd, after it had contributed its equity contribution, a precondition for the defendant to disburse the first tranche of the loan agreement, constituted a breach of contract.
The court held that the real estate company was justified when it repudiated the contract after injecting its equity contribution into the project, inclusive of appraisal fees, front end fees, legal fees, commitment fees, stamp duty among others all in a bid to secure the loan facility from Shelter Afrique, only for the defendant to breach the contract by not releasing the loan facility.
Harrowing experience
Mr Acquah, who is also the immediate former first vice-president of the Ghana Real Estate Developers Association (GREDA), explained that he wanted to “tell this story so that other real estate firms in Africa can understand what happened.
“If we don’t take Shelter Afrique on so that they restructure their operations, they will continue to do what they did to us,” he explained.
Narrating the harrowing experiences he endured over the past seven years, Mr Acquah said, with the struggles he faced, “I could have died from the stress”.
“Yet, Shelter Afrique was created to support companies such as mine, to help solve Africa’s affordable housing crisis. Instead, their procedures are cumbersome, expensive and unreliable.
“I had mortgaged all my documents with Shelter Africa, and they hadn’t even paid a cent. We used all that we had as equity.
“I did follow up, sending email and at some point, their MD signed a disbursement and called me that he had signed the disbursement… but it never came,” Mr Acquah explained.
He recalled that he had to pay US$50,000 for legal costs, US$52,000 in stamp duty and over US$150,000 as a commitment fee.
Background
Giving a background, Mr Acquah explained that on December 15, 2016, Shelter Afrique and his company Blue Rose Ltd executed a loan agreement where the Shelter Afrique agreed to advance to his company, $5.2 million to enable it to construct 170 housing units of two-, three- and four-bedroom houses and associated infrastructure for outright sale to the public.
“Initially, it was agreed between us that the $5.2 million was to represent 64 per cent of the total construction cost of the houses to be developed.
“Furthermore, we agreed that Blue Rose Ltd would contribute the remaining 36 per cent of the project's cost, amounting to $2.92 million in equity.
A subsequent amendment in October 2017, he explained, slightly altered the equity ratio with Shelter Afrique’s contribution reducing to 63.17 per cent and Blue Rose Ltd’s increase to 38.83 per cent.
“Even in that circumstance, we still agreed and paid 38.83 per cent of the total amount as our commitment to the agreement, but Sheter Afrique failed,” he added.
“The disbursement never came. Meanwhile, they held all our documents. We could not work for close to two years. Eventually, in 2018, we terminated the contract,” Mr Acquah explained, adding that the delay stalled Blue Rose’s operations and threatened its very existence.
On its feet
Mr Acquah returned from the Africa CEO Conference in Nairobi, where he was celebrated as the Most Respected CEO in Africa (Real Estate category) at the 5th Africa’s Most Respected CEO (AMRCEO) Awards organised by The Business Executive in Nairobi, Kenya.
“Blue Rose is gradually coming back on its feet. The company continues to turn decent, affordable homes into modern, thriving communities, with integrated schools, businesses and essential amenities,” he remarked.