Battle over Shiva Uranium’s rescue taken to companies tribunal
The mine’s rescue operation faces further delays as one practitioner tries to get rid of the other two
The business rescue practitioner for the Gupta’s embattled Shiva mine, which holds one of the largest uranium deposits in the world, has submitted an urgent application to the companies tribunal seeking the removal of two other practitioners he claims were unlawfully appointed.
In the affidavit, submitted to the tribunal late on Friday, rescue practitioner Christopher Monyela sought an order to direct the Companies and Intellectual Property Commission (CIPC) to accept a form he filed on behalf of the company which appointed Juanito Damons as a senior practitioner of Shiva.
He also wanted it to remove a form from the company filings which appoints two other practitioners — Mohamed Tayob and Eugene Januarie.
Last week Business Day reported how the fraught business rescue of the mine had stalled over the appointment of the new practitioners. Operations had been closed since July and, consequently, employees had received no income since then.
Shiva and eight other Gupta-associated entities were put into business rescue — a provision in law for the rehabilitation for distressed companies — in February when they lost their banking facilities. The Industrial Development Corporation is the largest creditor concerning Shiva and is owed R287.5m.
In his affidavit, Monyela claimed that George van der Merwe was responsible for the unlawful appointment of Tayob and Januarie.
Van Der Merwe had been the CEO of Gupta companies Optimum, Koornfontein and Shiva (all now in business rescue) and, Monyela said, had been “at the forefront of the Gupta’s attempts to disrupt and frustrate the business rescue process in the [Gupta-owned] Oakbay group of companies”.
Monyela said he and the senior Shiva rescue practitioner Cloete Murray (since resigned) removed Van der Merwe from management in early June as he was obstructive and uncooperative. Yet in September, without Monyela’s knowledge, Van der Merwe appointed Tayob and Januarie and filed the record with the CIPC on behalf of the company.
On October 1 the CIPC informed Monyela that the appointment of Damons could not be processed due to a “potential conflict” but did not provide reasons. Meanwhile it accepted the filing of Tayob and Januarie’s appointments.
In law, a board cannot take decisions on behalf of a company after a business rescue practitioner has been appointed. But Tayob and Januarie, in e-mailed correspondence to Monyela, however said that, also in law, because he was a junior practitioner acting without a senior practitioner, Monyela had no authority to take decisions on behalf of the company.
Monyela said it inexplicable that the CIPC would refuse to file the valid appointment of Damons, yet accept the invalid appointment of Tayob and Januarie.
The CIPC told Business Day the potential conflict identified was that Monyela worked with Damons in other matters and had acted on behalf of the company in the appointment of Damons.
Respondents are required to file notice of opposition by close of business on Monday. Tayob and Januarie said they would reserve comment until the tribunal process had concluded.
Van der Merwe said the CIPC was of the opinion that he acted within the confines of law, while the applicants contended he did not.
“I will let the process take its natural course,” he said.
In his affidavit, Monyela said the matter was urgent.
“In order to rescue Shiva, it’s necessary to enter into agreements with third parties, to take over the operations of the mine so at to ensure that, amongst others, Shiva’s employees, the security tasked with protecting Shiva’s assets, Sars and Eskom, be paid what is owed to them,” Monyela said.
He said that without certainty about who the rescue practitioners were, the rescue could not proceed and no plans could be prepared.
Correction October 23 2018
This article was corrected to reflect that Shiva applied to the companies tribunal and not the competition tribunal