BACKGROUND:
ON October 7, 2013, Abia State Government entered into a Development Lease Agreement with Investment Guarantee Limited to Redevelop and Upgrade Abia Hotels Limited, Umuahia to a 3-star Protea Standard Hotel.
The agreement spanned 25 years, with specific obligations for Investment Guarantee Limited, including upgrading the hotel to a 3-star Protea Standard within 24 months, sourcing funds for the project, and paying an annual royalty of Three Million Naira (N3 Million) to the State Government.
BREACH OF OBLIGATIONS:
Twelve years (12 years) after signing the agreement, Investment Guarantee Limited has failed to meet its obligations, including:
1. Upgrading the Hotel to a 3-Star Protea Standard.
2. Sourcing funds for the project.
3. Preparing and submitting necessary drawings and development documentation.
4. Paying annual royalties to the Government.
CORRESPONDENCE AND NEGOTIATIONS:
The Abia State Government, through the Umuahia Capital Development Authority, engaged Investment Guarantee Limited in 2024, notifying them of the breached obligations. The company responded by submitting a letter dated December 23, 2014, claiming that they were granted a 10-year moratorium by the Government on royalty payments to enable them to Redevelop and Upgrade the hotel and recoup their investment within the agreed 25 years period.
Further correspondence revealed that Investment Guarantee Limited claimed to have invested over N900 million through a letter dated December 23, 2025. The Government requested evidence to support this claim in a letter dated January 14, 2025. An evaluation report by Jide Taiwo, dated August 22, 2025, later valued the property at N708,900,000.
NEGOTIATED SETTLEMENT:
The Government, in a bid to resolve the matter, initiated negotiations with Investment Guarantee Limited. After several discussions, a compensation package of N450 million was agreed upon, involving the company’s legal representative, Barr. Martin Uchehara Okoroafor of Martin Okoroafor & Co (Umezurike Chambers) appointed by the Managing Director of Investment Guarantee Limited via a Letter to the Government titled, “Notification of Absence on Health Grounds and Appointment of a Legal Representative” dated September 24, 2025, the Government team, Hon. Obi Aguocha (Member representing the Managing Director’s Constituency in the Green Chamber), and Hon. Lookman Ukara.
On October 30, 2025, the Legal Representative of the Managing Director officially wrote to the Government requesting for the payment of the agreed compensation sum into the Managing Director’s Keystone Bank account.
PAYMENT DETAILS:
The payment of N450 million was credited to the account of Managing Director and confirmed by the Bank in Umuahia following a letter from Barr. Martin Uchehara Okoroafor, dated October 30, 2025, requesting for the payment and providing the bank account details of the Managing Director.
CONCLUSION:
The Abia State Government has acted in good faith to resolve the breach of agreement, prioritizing the investment-friendly policies of the Government. The payment of N450 million compensation to Investment Guarantee Limited marks the conclusion of the matter and the Government has retaken possession of Abia Hotels Limited, Umuahia and currently working on the intended Redevelopment and Upgrade.
