The High Court has dismissed a bid to block Vision Group’s acquisition of Tongaat Hulett, handing the tech billionaire Robert Gumede-led consortium a partial legal victory and allowing the business rescue process of the sugar titan to sail forward without immediate legal hurdles.
RGS Group, a Mozambican outfit that had been vying for Tongaat, lodged an urgent interdict in November against the process. It argued that Vision had failed to raise the necessary funds, and accused the business rescue practitioners, Metis Strategic Advisors, of being in breach of the business rescue plan when they sought shareholder approval for the debt-to-equity swap while the acquisition remained incomplete.
In a Sens regulatory news filing, Tongaat said the High Court had dismissed RGS’s attempt to block the deal, stating that the rival bidder failed to demonstrate grounds for urgency. The court ordered RGS to pay the cost of the applications.
“I find that RGS has failed, first, to make out a case for urgency and, second, to satisfy the requirements for an interdict,” judge Mfuniselwa Elijah Nkosi said in the 22-page ruling.
Free the chains of legal entanglements — for now, Tongaat can proceed with the business rescue process, which began in 2022 after suspicious bookkeeping practices exposed holes in its accounts and left it scrambling to pay off debt. The Vision acquisition, which involves paying R8.5bn to creditors in exchange for the company’s vast sugar assets, is vital to the rescue operation.
The judgment also secures more than R2bn in post-commencement funding by the Industrial Development Corporation (IDC) for Tongaat. The IDC had warned that it would cancel the funding — which is being used to pay employees’ salaries and obtain the supplies needed to keep the business running — if the court entertained the RGS interdict request.
This looming possibility weighed heavily against the granting of an interim interdict, as Nkosi noted the potential repercussions for the financial stability of Tongaat, which supports the livelihoods of more than 500,000 people in the Southern African region, most of whom in KwaZulu-Natal.
Still, Nkosi granted RGS permission to supplement part B of its application, aimed at quashing the business rescue plan entirely, if RGS decides to pursue it. If it comes to pass, the legal challenge will further test Robert Gumede’s determination to add sugar to his vast wealth, which was built in the IT sector before spanning other sectors such as tourism, real estate and finance.
Tongaat also announced on Wednesday that it and the business rescue practitioners have appointed Johann van Rooyen and Gary Baranov executive directors and Evashni Govender company secretary.
Correction: The last paragraph of this story has been corrected to state that the board appointments were to Tongaat Hulett, not Vision.
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