Tegeta Exploration and Resources has for the third time applied for the liquidation of the Gupta family’s Oakbay Investments, saying that it is owed R400m.
In the founding affidavit filed with the Johannesburg high court earlier this month, Tegeta Exploration and Resources, which has been in business rescue for almost two years, asked that Oakbay Investments be wound up as it is unable to pay its debts.
In February 2018, Tegeta and seven other Gupta-linked companies were placed into business rescue — a provision of the Companies Act that provides for the rehabilitation of a distressed entity — after they became unable to transact when their banking facilitates were withdrawn.
Oakbay, a holding company owned and controlled by the Guptas, is not in business rescue.
Tegeta, as controlled by the business rescue practitioners, had previously applied for Oakbay’s liquidation: first in September 2018, when it claimed about R2m in fees, and again in February last year, when it claimed a further R3.8m regarding rental and services rendered to Oakbay.
In both instances Oakbay first opposed the claims but later made the payments, causing Tegeta to withdraw the applications.
Money loaned
Under SA law, liquidators are empowered to convene an inquiry into the company in question and can subpoena anyone with any knowledge of its trade dealings, affairs and property.
This time around the amount owed is R402m and relates to money loaned to Oakbay by Tegeta. A loan agreement between the two indicated the money was advanced for what is only described as “business purposes”. In terms of the agreement, Oakbay had to repay the loan 365 days after notice or demand of repayment had been issued by Tegeta.
Though the loan agreement does not stipulate the amount, business rescue practitioner Kurt Knoop said in his affidavit the amount had been determined and reported on through a forensic investigation. Oakbay has failed to pay the amount.
Without a bank account, “it is impossible that the respondent will ever again be able to obtain banking facilities in SA ... [or] ever again be able to transact as a business in SA,” Knoop said in the court papers.
Legal challenges
Additionally, because Oakbay’s entire business depends on the underlying value of its subsidiaries, “the entire business foundation of the respondent has failed”, Knoop said. “It is neither rational nor reasonable to expect that the respondent can ever recover as a business.”
The rescue of the Gupta companies has been frustrated and delayed by a number of factors, including an onslaught of legal challenges brought against the practitioners, a number of which were launched by Oakbay Investments.
Oakbay Investments’ acting CEO, Ronica Ragavan, did not respond to an e-mailed request for comment.
Tegeta’s lawyer, Bouwer van Niekerk, said on Friday he understood that Oakbay intended to oppose the application but he had not yet received the responding court papers.
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