Gupta custody battle is ending
TWO MINES: FAMILY STILL TRYING TO CONTROL EVENTS
Fights for Optimum Coal Mine and Shiva Uranium resolved in court.
Fights for Optimum Coal Mine and Shiva Uranium resolved in court.
Two jewels in the Gupta tiara – Optimum Coal Mine and Shiva Uranium – were the subject of legal action again recently, the latest in an unbelievable saga of intrigue and lawfare starting in February when business rescue practitioners (BRPs) took control of the companies.
There have been close to 50 legal cases involving eight Gupta companies under business rescue. Most involved attempts to liquidate the companies, strip the assets and pocket 10% of the proceeds (likely exceeding R200 million).
Others involved attempts to replace the BRPs with more agreeable agents that would, no doubt, expedite the asset-stripping that would ensue. Every case was defeated. The first case, heard last month, involved an attempt by Swiss-based Charles King SA to block the sale of Gupta holding company Tegeta, to anyone but itself.
The case was dismissed in October by the High Court in Pretoria and referred last month to arbitration, where Charles King again came up short.
Charles King, which BRPs believe is being directed by the Guptas from abroad, claimed a saleof-shares agreement signed in 2017 gave it the right to purchase Tegeta for R2.9 billion – well short of its asset worth (including Optimum and Shiva).
One of the conditions of the agreement was that Charles King put down a R66.7 million deposit.
This was paid on October 22 2017 but was R2.3 million short.
The Guptas used the deposit to pay salaries and other running expenses, rather than place these funds in a trust account pending settlement of the full purchase price and transfer of the shares.
The arbitrator decided Charles King’s claims to Tegeta failed at the first hurdle, the short-payment on the deposit, which resulted in the cancellation of the sale-of-shares agreement by the BRPs.
The BRPs cancelled the Charles King sale agreement when they took control of Tegeta and seven other Gupta companies placed in business rescue in February on the grounds that several conditions in the agreement hadn’t been fulfilled, among them the short payment on the deposit, non-compliance with black economic empowerment requirements and lack of sign-off by the Competition Commission.
“This now clears the way for the sale of Optimum Coal, which we would hope will be wrapped up before the end of the year,” says BRP Louis Klopper.
Former Optimum owner Glencore, energy and commodities group Vitol and Phakamisa are among the groups reportedly interested in buying Optimum.
A second case before the Companies Tribunal last week involved an attempt to remove Shiva’s BRPs and replace them with practitioners reportedly aligned with Gupta lieutenant George van der Merwe.
The tribunal ruled against Van der Merwe’s attempts to have Mohamed Tayob and Eugene Januarie appointed as BRPs at Shiva Uranium on the grounds that their appointment was irregular.
Attorney for the BRP, Bouwer van Niekerk of Smit Sewgoolam, says the resolution of these two cases helps in paving the way for the sale of Optimum and Shiva and bringing them out of business rescue.