Blue Rose Ltd which has been operational since 1988 has delivered over 2,500 housing units and employs more than 50 people in Ghana. In 2015, when Mr Eric Ebo Acquah, the founder of Blue Rose Ltd in Ghana, was introduced by the government of Ghana to Shelter Afrique, the signs were promising, he says. “At the introduction, they were to partner with me to improve affordable housing in Ghana,” says Mr Acquah who is also the immediate former first vice president of the Ghana Real Estate Developers Association (GREDA).
As part of his due diligence, he explained that he attended annual general meetings hosted by the institution in Kenya, Nigeria, and Ghana bolstering his confidence. The negotiations began and in 2016 the two parties signed an agreement. Under the terms, the bank was to provide US$5.2 million in financing, while Mr Acquah would contribute US$3.1 million in equity. A subsequent amendment in October 2017 slightly altered the equity ratio, with Shelter Afrique’s contribution reducing to 63.17%, and Blue Rose Ltd’s increasing to 38.83%.
But Shelter Afrique delayed in releasing the funds, leading to a court battle that took years. “It has taken seven years for the court to rule. We want to tell this story so that other real-estate firms in Africa can understand want has happened. If we don’t take them [Shelter Afrique] on so that they restructure their operations they will continue to do what they did to us,” said Mr Eric Ebo Acquah, on a recent visit to Nairobi.
For two years his company couldn’t work, yet he had to keep paying the staff as he waited for the project to kick off, he added. “I had mortgaged all my documents with them and they hadn’t even paid a cent. We used all what we had as equity. I did follow up writing on email, and at some point their MD signed the disbursement and called me saying he had signed the disbursement. Yet banks were also chasing after me. At some point, the banks came and took all my cars away… It caused me a lot of pain.”
> How Real Estate Developer Won Court Battle Against Shelter Afrique
According to evidence submitted before the High Court in Accra Ghana, Blue Rose fulfilled all the pre-conditions set out in the agreement for the first disbursement. “The disbursement never came,” Mr Acquah said. “Meanwhile, they held all our documents. We couldn’t work for close to two years. Eventually, in 2018, we terminated the contract.”
The delay not only stalled Blue Rose’s operations but threatened its very existence. “I had to pay for fees even before the project started. I paid USD50,000 for their legal costs, USD52,000 in stamp duty, and over USD 150,000 as a commitment fee. I transferred over USD150,000 to them as commitment fee all this is 2016. And this is not all. If I am paying all this money as someone who is looking for equity and at the end of the day I do not get the support and I am a medium-sized company it is a very bitter experience,” he expressed.
I had to look for all the documents that they had asked for, he added. “It was such a huge file, and even though the process was cumbersome as we were the ones looking for funding to support our work in affordable housing. We also knew that undertaking a joint project with Shelter Afrique would give us international recognition, that would put the company at the top. We were doing fine in our own small way, but as a company we must have a future, and we must spur. Shelter Africa was set up for that purpose.”
Yet, Shelter Afrique was created to support companies to help solve Africa’s affordable housing crisis. Instead, their procedures were cumbersome, expensive, and unreliable, according to Acqua. “When we went to court, they had five lawyers, I had only one lawyer. But I knew that I had a good case, and I was in the dock 12 times.”
The ruling which stretches across 43 pages has offered vindication after years of silence, stress, and lost opportunities, he added. Mr Acquah shared his experience while attending the Africa CEO Conference in Nairobi, where he was feted Most Respected CEO in Africa (Real Estate) at the 5th Africa’s Most Respected CEO (AMRCEO) Awards organised by The Business Executive in Nairobi, Kenya.
Blue Rose is back on its feet, he noted. The government of Ghana recently conferred Mr Acquah the country’s second-highest civilian State honour, Member of the Volta (MV), for his contributions to housing development. “The company continues to turn decent affordable homes into modern thriving communities, with integrated schools, businesses, and essential amenities,” he says.
> Kenya’s Banking Sector Doing Well, Says KBA Latest Survey
Leave a comment