Court Orders Business-Rescue Practitioners Be Allowed Back At Gupta-Linked Firms

This comes after business-rescue practitioners were told they were "no longer welcome" by the very Gupta-linked directors that appointed them in the first place.
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An appeal to have business rescue practitioners barred from the office of several Gupta-linked companies has been overturned in the South Gauteng High Court in Johannesburg.

Business rescue practitioners Louis Klopper and Robert Knoop were told they were "no longer welcome" by the very Gupta-linked directors that appointed them in the first place, News24 previously reported.

This comes after the pair started asking questions about a suspicious transaction involving the sale of shares in Tegeta Resources and Exploration, the holding company for the Optimum and Koornfontein mines.

Klopper and Knoop were appointed by Gupta lieutenants Ronica Ragavan and Ugeshni Govender in mid-February this year, after several of the notorious family's businesses struggled to meet payment obligations.

The pair has been finalising business rescue plans for each of the entities placed under business rescue, including the Optimum and Koornfontein mines, when they were kicked out of the Grayston Ridge Office Park offices at the beginning of April.

Klopper and Knoop then turned to the courts, filing an urgent application, and Judge Denise Fisher handed down judgment in their favour, allowing them to return.

Fisher said the application should not have been necessary in the first place, and ordered that the business rescue practitioners' legal costs be paid.

"That the respondents have opposed the application suggests a vexatiousness which ... should attract the court's censure."

However, not happy with the outcome, Ragavan, Govender and six others then appealed Fisher's judgement.

In dealing with the appeal, Judge Moroa Tsoka pointed out that the majority, if not all, of the businesses in question supplied services on behalf of the people of South Africa.

"In particular Tegeta Exploration and Resources (Tegela), Koorfontein Mines, Optimum Coal Mines and Terminal are involved in the supply of coal to Eskom. The latter is a national asset on which the economy and the population of this country rely for the supply of electricity," said Tsoka.

Tsoka said Treasury learnt in March, through the public media, that Tegeta had concluded a sale of shares transaction with a foreign entity in excess of R66m in contravention of the Exchange Control Regulations.

"It is evident that it is in the interest, not only of the employees and creditors of these entities that the affected companies be rescued, but also in the interest of the entire country on which the economy depends."

"That it is in the public interest for these entities to be rescued, is obvious," he said.

Tsoka said it was undisputed that the rescue practitioners, in executing their duties, were performing a public and statutory duty beneficial to the people of South Africa.

He went on to say that if the entities were permitted to carry on running their business without the control and authority of the rescue practitioners, it would not only be highly detrimental to the country, but also unlawful.

"It is self-evident that the conduct of the rescue entities be thoroughly examined to establish whether these rescue entities conducted themselves unlawfully and whether this unlawful conduct put these companies in distress in the first place."

"To enable the rescue practitioners to have unrestricted access to the premises to perform their statutory duties and obligations is therefore in the public interest," Tsoka said.

"To deny the rescue practitioners the unrestricted access to the premises, in my view, is to subvert the very essence of business rescue, which is for the rescue practitioners to have 'full management control of the company'."