Johannesburg - The financial health of Queensgate Hotels & Leisure is seriously in question.

A Queensgate report on the Stock Exchange News Service (Sens) declares that "the Queensgate board of directors is reviewing the content of media reports containing allegations about the group's financial condition, in order to determine their origin and accuracy", and that the company will make a further, detailed announcement as soon as possible.

Last week other interesting details were also published on Sens: since the end of 2009 the group's head has disposed of almost R8m worth of shares.

In December last year Queensgate chief executive Andrew Hubbard sold shares to the value of R577 307.25, and in January another R2.1m worth.

According to a circular by Southern African Tourism Update Online, the financial problems are extremely serious. Among the problems, tour operators with room reservations were told that Queensgate no longer had a rental agreement with Park Inn or the Inn on the Square in the Western Cape.

The circular advises operators to pay the hotel deposits again, to the hotels, and then demand their original deposits back from Queensgate.

One operator says that if this second deposit is not paid, reservations for the World Cup soccer tournament will be invalid.

Hospitality Property Fund, which owns the Queensgate property, confirmed to Tourism Update Online that a lease agreement with Queensgate for the property, as well as for the Radisson property, has been suspended.

Andrew Rogers, chief executive of the fund, told Tourism Update Online that it seemed that Queensgate had no money at all and tour operators could struggle to get their money back. Tourism

Update Online says that Three Cities, which concluded a large management contract with Queensgate last year, confirmed that it had taken over the lease agreement.

Three Cities is however not aware of any financial problems.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.