AMI hospital faces imminent closure

AMI Hospital or Trauma Center at Msasani Dar es Salaam is facing imminent closure after it failed to comply by Tanzania Court of Appeal order that wanted it to deposit in court USD 1,514,000 plus a monthly rent to a tune of USD 64,000 per month following a tenancy agreement dispute.

A panel of three Court of Appeal judges, Justices Mbarouk Mbarouk, Salum Massati and Katherine Oriyo ordered African Medical Investments (T) Ltd (AMAI) to make the deposits a month after the ruling which was issued on the 12^th day of February 2015, an order that has not been honored. 

The court made their ruling on civil application No. 185 of 2014 filed by AMI in protest against execution of a ruling on main commercial suit No. 104 of 2013 that it lost to its Landlord (local business man Navtej Singh Bains) in respect of a building where the company is conducting its business.

AMI Hospital had lost the case filed by the landlord for failure to pay rent for the past 26 months in a legal battle at the Tanzania Commercial Court in November 2014 and were issued with a Notice for Eviction by the landlord.

AMI subsequently filed for Bankruptcy protection to the High Court of Tanzania last Friday stating that it was operating insolvently having incurred losses for the past two years.

AMI Plc Chief Executive Officer (CEO), Mr Theunis Peter Botha, also a Director and CEO of the local AMI Hospital in Tanzania, filed the Bankruptcy application in the High Court of Tanzania.

 AMI Tanzania is wholly owned by its London Company AMI Plc which was kicked out of the London Stock Exchange in February 2014 for trying to sell its assets in Maputo without shareholder disclosure.

Through a notice released last week on Wednesday (25^th March), Mr Lawrence Ochola, a Kenyan National working as Hospital Accountant, appealed for all stakeholders to stay cool and that AMI Hospital is operating normally.

“The management of AMI hospital –Dar es Salaam wishes to take this opportunity to acknowledge to its various stakeholders that we are aware of their fears and concerns that have been elicited by news that appeared in a section of local media to the effect that AMI has filed for bankruptcy.

In a bankruptcy petition filed last week before the High Court's Main Registry, the company alleges that it has been incurring losses in terms of billions to the extent of having several outstanding liabilities and debts which are now exceeding its ability to pay to different creditors.

"The petitioner (AMI) incurred a net loss of 1.146 million US dollars in the year ended February 28, 2013, while in the year ended February 28, 2014, the petitioner incurred a net loss of 775,000 US dollars," reads a section of the petition document.

It is stated that the company was also required to pay outstanding dues to institutes, notably the National Social Security Fund (NSSF) and the Tanzania Revenue Authority (TRA) and individuals.

According to the petition, given the value of the assets of the company and the amount of money owed to it by creditors, there was no way it would be able to raise enough funds for paying them as well as meeting her obligations.  

There are also records showing that Lancet Laboratory (T) Ltd filed for an urgent application against AMI Hospital eviction claiming over TSh 150m owed to them by AMI Hospital.

Inside information has it that several creditors are now in a limbo as the Hospital owes over $4m to them including the biggest creditor being the Landlord Mr N Bains, Doctors, Staff, TRA, Pharmaceutical suppliers and other suppliers.

Learned counsel Dilip Kesaria, who represented the Landlord, asked the court to issue a final notice of eviction which has been outstanding since September 2014 against AMI Hospital.