Gupta rescuers face court

42 CASES: ALSO DEALING WITH ATTEMPTED SABOTAGE OF OPTIMUM COAL MINE

Infamous family appear to have drained the company of cash. Moneyweb

The business rescue practitioners (BRPs) trying to save the eight Gupta-owned companies placed under business rescue in February have had to face down 42 court cases in less than four months. That works out at more than 10 a month.

The blizzard of litigation kicked off within days of BRPs being appointed in February. Several of the cases came from liquidation practitioners seeking to liquidate, rather than rescue the crown jewel in the portfolio, Optimum Coal Mine. All of these attempts failed.

In recent weeks, there was an attempt to sabotage Optimum Coal Mine when overhead cables supplying power to trains transporting coal were cut. Optimum had to replace the cables at a cost of more than R3 million.

All this pales alongside the damage wrought by the Guptas themselves, who appear to have drained the company of cash – to the point where miners were sent underground without protective gear and machines were left to rot.

Within 24 hours of taking over as BRP for the Gupta companies, Louis Klopper testified before the Parliamentary Portfolio Committee. “The Guptas had treated them as their personal piggy banks,” he says.

One of the lawyers seeking to liquidate Optimum was former Gupta attorney Naushad Gattoo, who has since been referred to the Law Society for the alleged theft of R7 million from a client.

He is also accused of fabricating a court order supposedly freezing his bank accounts due to his association with the Guptas, and using this as a pretext for failing to pay over the client’s funds.

Its former CEO, George van der Merwe, also attempted a liquidation, having to appease angry workers. Just a few weeks later, he claimed he was a creditor of the company. He applied to have the BRPs of Optimum replaced with practitioners sympathetic to the Guptas, but it failed. Van der Merwe, who previously worked in the Gupta’s Sahara Computers laying cables, was seconded to run the mine. He was removed as CEO on the grounds that he lacked experience.

Optimum supplies Eskom with coal, and was acquired from Glencore in 2016 under dubious circumstances. Eskom slapped t Glencore, with a R2.1-billion fine for supplying sub-quality coal. The loss-making mine was placed in business rescue and then acquired by Tegeta Exploration and Resources, which is owned by the Guptas and former president Jacob Zuma’s son Duduzane.

Eskom then gave Tegeta a R586-million prepayment for future coal deliveries – almost exactly the amount needed by the Guptas to cover the shortfall on the R2.15 billion purchase price agreed with Glencore. Eskom then reduced the fine to the benefit of the Guptas.

The eight Gupta companies were placed in business rescue when Bank of Baroda announced it was pulling out of the country.

In documents before the High Court in Johannesburg, the BRPs say they uncovered a Vat refund of about R90 million due to Optimum Mine had been diverted to the bank account of a company called In House Wages, whose director, Ashvir Maharaj, had been appointed just two days after Optimum was placed in rescue. An anti-dissipation order to retrieve this money was issued by the court in April.

Knoop’s affidavit says Optimum was never able to meet its supply target of 700 000 tons a month because of the “deplorable state” of the mine’s equipment, “which was never properly maintained by the pre-existing management (no doubt due to the lack of funds), and their inefficiency”.

The Guptas treated them as their piggy banks