The chair of Mozambican consumer and agricultural goods group RGS, Momade Aquil Rajahussen, says the laying of a fraud complaint against the firm by the owners of Tongaat Hulett is just an attempt to “damage their good name”.
In January, Tongaat was sold to the Vision Consortium, led by SA business person Robert Gumede and Zimbabwean Rute Moyo, after a lengthy business rescue process marred by endless legal challenges.
Competing bidder RGS pulled out the day before the January creditors’ vote on who could buy the firm. It blamed the Tongaat business rescue practitioners (BRP), saying they were favouring Vision. This is something the BRPs have repeatedly denied.
It emerged that RGS did not have the R2bn upfront payment required and the bank letter provided to say the money was in an Absa Mozambique account was fake.
Absa confirmed to Business Day’s sister publication, the Sunday Times, it never issued this letter and an investigation is ongoing.
Vision director Moyo said RGS’s own version provided in legal papers in a separate court case revealed it knew the proof of funds letter provided to the BRPs was fake from December 15, but failed to tell Tongaat lenders or BRPs.
Instead, RGS continued to take part in the sale process, which ended on January 11, without the required funds.
Moyo said in a complaint laid at the Sandton police station last week: “The purpose of this affidavit is to submit to [the] police a complaint against RGS Group, its representatives and agents for a fraud committed through the perversion and distortion of truth during the process of bidding ... for Tongaat Hulett.”
While Moyo has opened a complaint, confirmed to Business Day by his lawyer Ian Small-Smith, there is no guarantee the police will investigate it or the National Prosecuting Authority will prosecute those who run RGS. A list of executive management including Rajahussen, CEO Hasnain Gulamo and an RGS attorney is named in Moyo’s complaint.
Rajahussen said of the complaint: “The only purpose is to stain our good name and reputation in the market.
“I don’t see any grounds for Rute or Vision to lodge a criminal complaint against RGS.
“We have not defrauded anyone in the process. This can only be a trick to throw the mud against RGS to cover the incompetence and failure to pay the amount that they committed to honour after the voting of the process of BRP.”
Something is fishy, he said, saying Vision had not provided payment for the Tongaat business yet and was trying to distract from that.
Rajahussen said: “Rest assured ... we will counter-sue whoever thinks that they can publicly stain our good name and reputation.”
RGS in other court papers in a separate legal matter in February blamed a junior employee for not putting the R2bn into the Mozambican bank account as required because he or she was worried it would not generate sufficient interest there. Instead, the employee acquired a letter saying that funds were available and supplied to Absa SA.
It said at the time, “though RGS deeply regrets this unfortunate incident, its senior management played no part and was ignorant of the untruthful statements inadvertently made to Absa SA”.
Moyo in his complaint does not believe this excuse. “It would seem unlikely that a junior employee (who would derive no benefit whatsoever from forging a letter on behalf of his employer) took it upon himself to manufacture the forged Absa letter and disregard an instruction from senior staff to pay R2bn, required for a major transaction, to Absa Bank Mozambique.”
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