Oakbay loses bid to remove business rescue practitioners
The judgment found the allegations of the practitioners lacking independence to be unfounded and determined there was no conflict
The Gupta family’s Oakbay Investments has lost its bid to have the business rescue practitioners removed from Tegeta Exploration and Resources.
In the judgment handed down in the Pretoria High Court on Friday, Judge Sulet Potterill dismissed the application and ordered Oakbay to carry the costs.
This brings the total number of cases brought against the business rescue practitioners of Tegeta and seven other Gupta-linked companies to 58, since they were put into rescue in February 2018.
Business rescue, as provided for by the Companies Act, aims to rehabilitate businesses that are in financial distress.
The companies include Tegeta Exploration and Resources; Optimum Coal Mine and Terminal; Koornfontein Mines; and Shiva Uranium, and are directly or indirectly controlled by Oakbay.
Tegeta, which is 29% owned by Oakbay, consented to the appointments of business rescue practitioners Kurt Knoop and Louis Klopper. Oakbay later approached the court to have Knoop and Klopper replaced, claiming they were conflicted and had displayed a lack of independence in maligning the Guptas as shareholders.
The company argued that, because the rescue practitioners of Tegeta are also involved in the rescues of some other Gupta-linked companies, they were unable to act in the best interest of these companies, particularly when it came to collecting on inter-company loans.
The judgment found the allegations of lacking independence to be unfounded and further determined there was no conflict. The judgment noted that if the rescue practitioners were removed, the pre-existing management would have control of Tegeta again until new practitioners are appointed — a process which would likely be protracted.
Potterill’s judgment was also scathing of the barrage of lawsuits that are hindering the rescue process.
“The ongoing litigation in this process needs to stop … Tegeta, Koornfontein Mines, Optimum Coal Mine and Optimum Coal Terminal are involved in the supply of coal to Eskom, a national asset with unsurmountable trouble. It is in the public interest that these entities are rescued.”
Potterill’s judgment said, “I will strive to ensure that the rescue is conducted in a manner that balances the rights and interests of all relevant stakeholders.”
She also took up a suggestion from the practitioners and ordered that they file a progress report with the court every six week until the rescue is complete.