Rescue practitioners resign from Shiva as IDC digs in
The business-rescue practitioners of eight Gupta-owned companies have been elbowed out of managing Shiva Uranium following court action by the Industrial Development Corporation (IDC).
Louis Klopper and Kurt Knoop resigned as rescue practitioners in light of the opposition to their presence at Shiva by the state-owned investor. The IDC is owed R287.5m by the gold and uranium mine — which ran into financial difficulties and was placed in rescue along with seven other Gupta companies in coal mining and services.
The rescue processes have been marked by a number of court battles, contempt of court charges, allegations and counter-allegations.
The eight companies have been at the heart of claims against the Gupta family, which is closely aligned to former president Jacob Zuma, and has been the centre of a public protector investigation claiming the corruption of state-owned enterprises to their financial advantage.
Thursday’s move has left the rescue practitioners focusing on the other seven companies under their care. While expressing relief at no longer having to deal with Shiva, Klopper said there was a buyer — BEK Holdings — for the mine, which had only produced gold and no uranium under Gupta ownership. BEK was set up by Elias Khumalo, who has been named in various media reports as a friend to Zuma.
Klopper said there had been continued interference from the IDC during the past two months, complicating the practitioners’ work.
The IDC has, as a major creditor, felt that the asset was not being fully managed by the practitioners and the relationship between the two has broken down.
The IDC had not responded to a request for comment by the time of publication.
The practitioners have gained access to the computer server in the Guptas’ Oakbay offices, securing records of the seven companies they are now managing, and allowing them to conduct forensic and criminal investigations — which Klopper said could be completed within six weeks and made public.
There have, according to reports, been unusual cash flows between a number of Gupta companies.
One of the immediate actions undertaken by the practitioners had been to order a stop to the mining contract between Optimum Colliery and Guptalinked contract miner JIC Mining. JIC had been charging up to R50m a month for work done underground, while the practitioners were paying R12m a month towards the contracted workforce, Klopper said, suggesting that this had been one of the ways to extract money from Optimum.
The National Union of Mineworkers has objected to the loss of 480 contractor jobs at the mine, but Klopper said the practitioners could not justify paying JIC up to R50m a month when other creditors were waiting to be paid.
Another victory by the practitioners had been overturning a Durban court block on Optimum’s coal exports through the Richards Bay Coal Terminal — an essential component in their business rescue plans, Klopper said.
Employees at VR Laser, one of the companies in business rescue, will have to wait a week after creditors asked for a seven-day delay to consider a sales option put to them by the practitioners on Thursday.
VR Laser staff at Optimum, who maintain drag lines and machinery, have been sent home on leave and their salaries will be left unpaid until the business is sold.