The board of directors had taken the company’s three joint liquidators to the South Gauteng High Court to stop the sale of its assets and won.
Johannesburg – While corruption-tainted facilities management company Bosasa’s name is the centre of attraction at the Zondo Commission on Tuesday, its directors were quietly celebrating a separate court victory that halted the sale of its properties.
The board of directors had taken the company’s three joint liquidators to the South Gauteng High Court to stop the sale of its assets and won.
In a 100-page ruling sent to all interested parties late on Monday, Judge AJ de Villiers (full names could not be verified) ruled that all assets sold during last year’s auction are declared null and void.
The court also ruled that the auctioneers should halt the process of transferring ownership of those assets to about 200 entities that bought movable assets like cars and properties.
The board of directors of Bosasa holdings argued that auctioning their assets was unlawful as their subsidiaries were under business rescue and protected by the law.
“Any auction of and any other sale, whether by private treaty or otherwise, of assets of African Global Operations (Pty) Ltd (in liquidation); Bosasa Properties (Pty) Ltd (in liquidation); Global Technology Systems (Pty) Ltd (in liquidation); Leading Prospect Trading 111 (Pty) Ltd (in liquidation); Bosasa Youth Development Centres (Pty) Ltd (in liquidation); Black Rox Security Intelligence Services (Pty) Ltd (“the six business rescue companies”) a. Before the second meeting of creditors; and/or b. Without the written consent by resolution of the board of directors of African Global Holdings (Pty) Ltd (“Holdings”); and/or c. Without the consent of the court, is prohibited.
“Any sale prior to date of this order, whether by auction or private treaty or otherwise, of assets of any of the six business rescue companies, sold whilst such company was in liquidation and without the written consent by resolution of the board of directors of holdings, is declared to be unauthorised; 9. The transfer and registration of immovable property to any prospective purchaser of assets of any of the six business rescue companies, sold prior to date of this order and whilst such company was in liquidation.
’’Without the consent of the second meeting of creditors; and/or e. Without the written consent by resolution of the board of directors of Holdings; and/or f. Without the consent of the court, is prohibited,” the judge ruled.
Among the biggest losers in the ruling was the South African Revenue Service (Sars), which joined the court because it argued that it is the first in the line of entities to claim money from the auction as it is owed R500 million in tax.
Another big loser was Fidelity Security Services, which had bought some facilities of Bosasa and some movable properties during the highly publicised auction of late last year, just months after Bosasa founder Gavin Watson died in a car accident near OR Tambo International Airport.
According to the final ruling, both Sars and Fidelity joined the court battle that started in March this year. Sars sought leave to intervene in both the auction and business rescue applications and Fidelity in the auction application.
The matter was heard virtually on May 21 and 22 this year.
The ruling also shows that the judge was not happy with the conduct of the liquidators as in his concluding remarks he said their conduct was unlawful and should be penalised.
“I order that this judgment be referred to the Master. I bring two matters to her/his attention: The deliberate unlawful conduct by the provisional liquidators and the penalising costs order that I make against the provisional liquidators; and… the potential impact of the deliberate unlawful conduct by the provisional liquidators on the costs of winding-up the companies in liquidation.”
Political Bureau