Gupta mine fights R31m municipal rates bill

A Gupta-owned mine in the North West has been slapped with a rates bill of more than R31 million by a struggling municipality.

The Shiva Uranium mine in Hartbeesfontein, in the City of Matlosana Local Municipality, was placed under business rescue in 2018 after the controversial family’s South African business empire started to collapse as law enforcement agencies and creditors owed millions of rand began circling.

Business rescue proceedings are meant to facilitate the rehabilitation of a financially distressed company by providing, among other things, for the temporary supervision and moratorium on the rights of claimants, and the development and implementation of a plan to rescue the company.

The family fled South Africa for Dubai, in the United Arab Emirates, in 2016 and the City of Matlosana sought a default judgment at the North West High Court in Mahikeng in 2020 to force Shiva Uranium to pay the R31m it owed the municipality.

However, Shiva Uranium’s business rescue practitioners, Mahier Tayob, Kgashane Monyela and Eugene Januarie, filed a counter-application for interlocutory relief, pending the main proceedings in a matter before court.

According to them, Shiva Uranium was placed under business rescue proceedings precisely because of outstanding rates, among other issues.

In terms of the Companies Act, during business rescue, no legal proceedings, including enforcement action against the company or in relation to any property belonging to the company or lawfully in its possession, may be commenced or proceeded with in any forum except with the business rescue practitioners’ written consent or with the leave of a court and on any terms the court considers suitable.

The business rescue practitioners argued that before the City of Matlosana’s claim was adjudicated, the claim regarding the provision of the act placing a moratorium on legal action against a company under business rescue unless permission is granted should be settled.

On June 21, North West High Court Acting Judge Andrew Reddy granted the business rescue practitioners an order to stay the R31m payment demand until the moratorium claim was settled. In addition, the high court registrar and Acting Judge Reddy’s secretary would be asked to allocate a preferential date for the hearing of the moratorium application.

In his ruling, the judge said: “The moratorium on legal proceedings against a company during business rescue proceedings is of cardinal importance as it provides a breathing space to enable a company to restructure its affairs and also allows the practitioner/s, together with the company’s creditors and affected parties, an opportunity and time to formulate a business rescue plan.”

The Guptas bought the Shiva Uranium mine through one of their companies, Oakbay Resources and Energy, with the help of a R250m loan from the state-owned finance institution, the Independent Development Corporation (IDC), in April 2010. The IDC loan now stands at over R300m including interest and other costs.

In November 2021, the Constitutional Court settled a dispute among the business rescue practitioners which Acting Judge Reddy described as continuous bickering that made the execution of their mandate dilatory.

He found that the discord between them circumvented the expeditious conclusion of the business rescue and, as a result, the process had effectively been suspended for the past two years.

In May, the Gauteng High Court, Johannesburg, endorsed Eskom’s attachment of the City of Matlosana’s bank accounts in December 2020 after the municipality’s debt spiralled to nearly R1.25 billion and its appeal of the ruling was unsuccessful.

City of Matlosana spokesperson Ntswaki Makgetha did not respond to questions from the Sunday Independent by the time of publication.