Cape Town - Gupta-owned Oakbay Investments has lost its bid to oust the business rescue practitioners of another of the controversial family's companies, Tegeta Exploration and Resources.
The Supreme Court of Appeal (SCA) on Friday dismissed with costs Oakbay Investments' challenge to the North Gauteng High Court's refusal of its bid to have Tegeta Exploration and Resources' business rescue practitioners Johan Louis Klopper and Kurt Robert Knoop removed.
In August 2019, North Gauteng High Court Judge Sulet Potterill dismissed Oakbay Investments' application to have Klopper and Knoop axed as business rescue practitioners of Tegeta Exploration and Resources, which has three wholly-owned subsidiaries, Optimum Coal Mine, Koornfontein Mines and Optimum Coal Terminal.
Judge Potterill also ordered Klopper and Knoop to file reports six-weekly in terms of the Companies Act to the court.
Oakbay Investments, which is not under business rescue, owns 29.05% of Tegeta Exploration and Resources and is the holding company of other Gupta-owned firms Shiva Uranium, Optimum Nekel Mining and Exploration, Optimum Vlakfontein Mining and Exploration and Optimim Overvaal Mining and Exploration, which are all also under business rescue.
According to Oakbay Investments, the appointment of Klopper and Knoop gave rise to a conflict of interest between their duties in relation to Tegeta Exploration and Resources and their duties in relation to Optimum Coal Mine and the other subsidiaries, Koornfontein Mines and Optimum Coal Terminal.
Knoop and Klopper were appointed, together with Juanito Damons and Chris Monyela, as the business rescue practitioners of Optimum Coal Mine and
jointly for Koornfontein Mines. Knoop was also appointed as the sole business rescue practitioner of Optimum Coal Terminal.
SCA Judge Malcolm Wallis, with judges Nathan Ponnan, Halima Saldulker, Glenn Goosen and David Unterhalter concurring, found that Oakbay Investments' application seemed to have little purpose as in order for the company to obtain leave it had to show that a case of conflict of interest justifying the removal of the business rescue practitioners appeared from the existing papers.
"I am accordingly satisfied that Oakbay's complaints was not established. Nothing more than the possibility of conflict in some unlikely circumstances in the future emerged from these papers. In those circumstances there is no reasonable possibility of an appeal succeeding and the application for leave to appeal must be dismissed," said Judge Wallis.
Oakbay Investments chief executive Ronica Ragavan told the SCA that the business rescue practitioners will effectively be forced to act as mediators between Tegeta Exploration and Resources and Optimum Coal Mine whilst representing both the entities simultaneously.
"At present it seems they are intent on compromising Tegeta’s claim in Optimum Coal Mine for the sole purpose of extinguishing all creditors' claims in Tegeta, to the extreme detriment of the shareholders and other creditors," she explained.
Ragavan accused the business rescue practitioners of trying to represent the interest of Optimum Coal Mine, as a debtor of Tegeta Exploration and Resources, and those of Tegeta Exploration and Resources, as a creditor of Optimum Coal Mine, at the same time.
She said the business rescue practitioners cannot simultaneously act for both Gupta companies in the face of a dispute between them, the resolution of which can only be beneficial to the one and detrimental to the other.
Ragavan insisted that this showed that it was no longer only a fear of a conflict of interest manifesting itself but that it a conflict of interest has unequivocally arisen.
Political Bureau