In February 2023, Europe’s hospitality chain, MGM Muthu acquired four Kenyan hotels previously owned by the Sun Africa Hotel Group.
This gave them control over Sovereign Suites Hotel and Spa in Limuru, Lake Naivasha Country Club, Keekorok Lodge in Masai Mara, and Nyali Beach Hotel and Spa in Mombasa.
In August 2023, they acquired the Warwick Hotel in the touristic Nanyuki – Kenya’s gateway town to Mt. Kenya, Ol Pejeta Sanctuary, and Mt. Kenya National Park.
Then they leased and reopened the 4-star Silver Springs Hotel located in Nairobi’s high-end Upper Hill neighborhood.
Silver Springs Hotel, associated with the families of the late Aggrey Wahome and Kenya’s third President, the late Mwai Kibaki, had closed down in 2020 due to COVID-19.
While the total cost of acquisition of the Kenyan hotels is unknown, conservative estimates place it at about US$ 50 million.
The hotels are now operating as; Muthu Silver Springs Hotel – Nairobi, Muthu Warwick Mount Kenya Hotel – Nanyuki, Muthu Lake Naivasha Country Club – Naivasha, Muthu Sovereign Suites & Spa – Limuru, Muthu Nyali Beach Hotel And Spa – Mombasa and Muthu Keekorok Lodge – Maasai Mara.
Rags to Riches
MGM Muthu Group was founded by Dr. Manuel Gnana Muthu (MG Muthu), an Indian industrialist from the southern Indian state of Tamil Nadu.
Born in 1935 to a poor family of laborers, MG Muthu attended school briefly before quitting due to lack of school fees.
He would later recount that he quit school because he found it hard concentrating in class on an empty stomach.
At the age of 17, he joined his father to work as a headload worker, loading and offloading ships that docked at the Chennai harbor.
After a few years, Muthu started offering logistics services to small-scale clients having mastered the ins and outs of the dock business.
MG Muthu developed a reputation at the Chennai port for delivering on time and exceeding his customers’ expectations.
Bigger clients came calling for his services and MG Muthu formalized his business in 1967, setting up MGM Anand Transport, a logistics company that grew to win many Tamil Nadu government and private contracts at Chennai Port.
In the 1990s MG Muthu formed MGM International Exports which expanded his logistics services into actual import-export of goods in and out of India.
The group then ventured into hospitality, fast food restaurants, and amusement parks across India before expanding globally.
The group is currently engaged in Logistics, Hospitality, Liquor and Distillery, Housing, Infrastructure, Movie Production, Entertainment, Packaging, Fast Foods, and International Trade.
MG Muthu, the founding Chairman and CEO of MGM Muthu Hotels died in 2018 leaving behind a rich legacy of hard work, consistency, and not settling.
His business empire is now being managed by his two sons; MGM Maran (Director and Promoter) and MGM Anand (Group Managing Director).
Expansion of the MGM Muthu Hotels chain
In the last 10 years, Europe-based MGM Muthu Hotels has been involved in a purchasing spree of hotels across the world, especially in Europe.
In 2017 for instance, the group splashed about GBP 10 million to acquire 5 hotels in Scotland including; Royal Hotel (Tyndrum), Ben Doran Hotel (Tyndrum), and Dalmally Hotel (Oban).
Others were Alexandra Hotel (Oban) and Nairn’s Newton Hotel which was a favorite holiday destination for Charlie Chaplin and his family in the 1960s.
The MGM Muthu Hotels now operates over 50 hotels and resorts in Portugal, Spain, England, Scotland, France, India, Cuba, and Kenya.
Tax evasion and money laundering
In recent years the Muthu brothers, MGM Maran and MGM Anand have run into headwinds with Indian authorities over allegations of tax evasion and money laundering.
Between December 2021 and April 2022, the Enforcement Directorate (ED), India’s financial crime-fighting agency, seized assets in the form of land and shares in four companies amounting to about USD 35 million belonging to the brothers.
The seized assets were penalties for siphoning off funds abroad under the garb of Oversees Direct Investments (ODI) through false declarations and structured transactions that were not approved by the Reserve Bank of India (RBI), thereby contravening India’s Foreign Exchange Management Act (FEMA).
Similarly, India’s Income Tax Department raided over 40 locations belonging to MGM Muthu businesses and family premises on allegations of tax evasion.
One of the Muthu brothers, MGM Maran is said to have surrendered his Indian passport and taken up a Cyprus passport, perhaps to avoid ‘persecution’.
