Case against Vision’s Tongaat ownership thrown out
The Vision consortium remains the owner of Tongaat Hulett after the court case against its business plan and ownership was thrown out of the Durban high court for lack of urgency.
Supplier Powertrans Sales and Services had brought the case, arguing that the Vision business plan and thus the purchase was unlawful and should be overturned.
However, it also emerged that the person who filed the case as the owner of Powertrans was in fact not the owner but had stepped down in 2020, making it unlikely the case would get far.
Vision is led by SA businessman Robert Gumede and Zimbabwean Rute Moyo.
On Tuesday, Durban high court judge Mbuzeni Mathenjwa found that Powertrans did not meet the legal criteria for urgency and that Powertrans’ lawyers had unreasonably refused to have the case heard at a later date. He said the applicants “attorneys were opposed to any sensible suggestion about rescheduling”, and struck the case off the role.
Mozambican consumer goods group RGS, which pulled out the day before the business rescue vote as it did not have funds in its bank account despite having a fraudulent letter saying it did, had tried to intervene in the case. But Mathenjwa ruled that since he was striking the case off the role, the group could not join it.
In its court papers RGS claimed it needed the court to help it buy Tongaat as the business rescue practitioners of the sugar producer were unprofessional and had favoured Vision.
The Tongaat business rescue practitioners (BRPs), Metis Strategic Advisors, responded to the claims by RGS published in Business Day and in court documents, denying favouring Vision or preventing RGS from doing required diligence on Tongaat.
“We take the enormous social impact of the businesses under our care very seriously,” Metis said. “We therefore strongly deny allegations of inappropriate or unethical behaviour. The statements made are offensive, baseless and potentially defamatory. The court of public opinion is an unnecessary distraction to all involved and is often chosen as a platform to those who are unable to substantiate their case in a real court of law.”
They pointed out that RGS was unable to buy Tongaat as it could not prove it had funding in the bank account as required by Tongaat’s lenders.
They also denied leaking information as they had been accused of and said there are good reasons why RGS and Vision’s business plans had the same figure offered to the sugar industry. This was not because the BRPs shared information but as both bidders negotiated with the same industry organisation.
They also denied RGS’ claims that they had advised the SA Sugar Association not to meet them. “The BRPs are guided by legislation to ensure due process is followed. As per the Companies Act, business rescue proceedings are intended to foster a balanced approach to save the business and deliver an outcome that optimises the position of all affected people.
“In Tongaat’s case these include growers, other milling companies, participants in the sugar industry as a whole, employees, pensioners, communities, suppliers of goods and services, including creditors, and shareholders.”
They also said they did not deny RGS access to conduct due diligence of Tongaat, but could not accommodate them as they had offered in April only to buy the Mozambican business.
The Industrial Development Corporation, which funded the running of Tongaat while in business rescue, insisted the whole business spanning three countries, SA, Zimbabwe and Mozambique, be sold as one entity.