The Vision consortium, led by Robert Gumede, is asking for financial guarantees from RGS, which launched a court application to stop the sale of Tongaat Hulett to Gumede’s group of investors.
Gumede said the legal challenge was baseless and intended to disrupt rather than act as a legitimate pursuit of justice.
“RGS was forewarned that if it brought an urgent application, security costs would be sought on the indisputable basis that RGS is peregrinus to this court, being a Mozambican company,” said Rutenhuro Moyo, on behalf of the Vision consortium, using the Latin term for a foreigner.
Moyo’s affidavit comes weeks after RSG filed an urgent application with the high court in Durban to have the consortium’s R8.5bn debt-to-equity swap deal to buy Tongaat blocked on grounds that Vision had failed to raise capital and that business rescue practitioners did not act in the interest of shareholders.
“The reason why we think the RGS case is spurious as a creditor is there is no locus standi, and because they were a bidder, and they withdrew, in addition, that they confirmed in their own affidavit that they did not have the funds,” Moyo said.
The transaction, which gave Vision virtually all of Tongaat, is framed by business rescue practitioners as the most viable plan yet to revive SA’s oldest sugar maker, which tumbled into business rescue in 2022 after dodgy accounting practices by former executives blew a hole in its balance sheet.
The process attracted several bidders willing to pay off creditors in exchange for an equity stake, including RGS, a prominent conglomerate that makes everything from hygiene products and edibles oils to sugar and soft drinks.
It pulled out of the race in January, citing a lack of co-operation from the business rescue practitioners.
Ulterior motives
The Vision group — led by the founder of Gijima Technologies, Gumede — said that RGS, having failed to demonstrate its financial capacity during the bidding process, was not acting in good faith but rather as a disgruntled bidder with ulterior motives.
“RGS is in fact a disgruntled bidder, whose true motive in bringing this and [a] prior application is to acquire the THL business,” Moyo said.
Neither Vision nor the lender group had agreed to disclose the acquisition agreement as it was confidential and RGS was not entitled to it, considering it was not acting as a legitimate creditor of Tongaat Hulett but rather as a disgruntled bidder, he said.
“This is a baseless and selfish position done under the guise of saving THL. The same shareholders were there when the huge fraud took place over six years ago and today act like heroes who can save the company, yet they are not putting in a penny of their cash to save THL SA,” Gumede said.
In an update from the turnaround experts, the business rescue practitioners are moving forward with the adopted plan, focusing on the asset transaction which involves selling the company’s business and assets as a going concern to the Vision parties.
“Vision continues to co-operate fully with the [business rescue practitioners] and executive management of the company to bring implementation of the asset transaction to a close as soon as possible. There is a core team focused on satisfying the conditions on which the plan is contingent and ensuring the implementation of the underlying transaction.”
According to the business rescue practitioners, the court process does not preclude them from going ahead with the asset transaction.
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