It’s Zunaid Moti vs Sisa Ngebulana as the businessmen fight for control of Rebosis
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by MANYANE MANYANE, SIPHO MABASO and KARABO NGOEPE
Johannesburg - An on-going battle between two powerful business partners is teetering on the brink of pushing the envelope for a hostile takeover.
The back and forth communications between Sisa Ngebulana and Zunaid Moti, which include court papers, have detailed a partnership gone sour and under-handed tactics to assume control of the business.
This week, the pair is set for a showdown at the annual general meeting (AGM) of Rebosis on Tuesday. At the centre of their battle is the voting rights which both parties believe they hold.
According to Moti, their dispute started when he increased his shareholding in Rebosis over a period from April to August last year. He became the largest Rebosis shareholder with 25.99%. Refusing to allow Moti to be in charge, Ngebulana bought a further R114 million worth of Rebosis stock at the end of August, to overtake Moti as the largest shareholder with a compelling interest of 31.26% in the group.
In an affidavit submitted to the High Court of South Africa on December 21, 2020, Moti claimed that Ngebulana, through his Amatolo Family Trust, was a debtor to the value of R125m. He said the sum consisted of R114m, being the purchase consideration of the shares acquired by the trust in an off-market transaction on August 31, and the interest charged as a result of the deferred purchase consideration of the shares until December 18, 2020, was R11m.
Moti claimed no payment was made on the due date and requested the sequestration of Amatolo, calling it insolvent.
Moti's lawyer Manogh Maharaj said the businessman had a plan for the turn-around of Rebosis, which had a debt of approximately R10 billion. He added that neither Nedbank (the primary financier of Rebosis) and Ngebulana were receptive to his proposals.
"Recent correspondence reveals that the chairman of Nedbank had written to Moti expressing an interest to meet, as long as the management of Rebosis facilitated the meeting. This Ngebulana did not allow to happen and instead bought Moti out, without being able to pay for his shares," said Maharaj.
He said Amatolo and the Billion Group (a 100% shareholder of Amatolo) could not meet their payment obligations for the shares and structuring fees.
"Several text conversations between Moti and Ngebulana revealed he could not make payment in terms of the agreement which Moti saw as an act of insolvency by the Amatolo Family Trust. Ngebulana further advised Moti he was attempting to raise funds to meet his payment obligations. Such funding didn't materialise", added Maharaj.
In his replying affidavit filed on February 4, Ngebulana said Rebosis management, bankers, financiers and institutional investors were uneasy with Moti being a major shareholder due to the "fact that he was a controversial" businessman.
"As such, I decided in order to sever the applicant (Moti) from Rebosis, I would negotiate with the applicant to not only purchase his shareholding but also to conclude an agreement with him that he will never again purchase shares in Rebosis," read the affidavit.
He added: "During my negotiations with the applicant, on behalf of the trust, I expressly and each time indicated to him that two (out of four) trustees of the trust had indicated they would only consider the contemplated transaction if I could obtain financing, on behalf of the trust, and as such, they had not approved the said transaction. Each time the applicant verbally indicated to me that he understood this."
Ngebulana added Moti was not a creditor of the trust and was therefore not suffering any prejudice.
"He can do with his shares whatever he wants to do," the affidavit read.
In the response affidavit to Ngebulana, Maharaj said Ngebulana has made misleading and contradictory statements to mislead the court to escape liability. He said Ngebulana's version of the facts was not only false, but far-fetched, improbable, and untenable.
"Ngebulana claims that without the express agreement and signatures of the other three trustees of the Amatolo Family Trust, that the share purchase agreement is null and void, and therefore, Moti is free to take back his shares," said Maharaj.
In a bid to ensure Moti does not vote on Tuesday, Ngebulana is said to have tried to assert to the Central Securities Depository (CSDP) that the trust as the owner of the shares, must be authorised to vote on them.
Maharaj said the response from the CSDP was that Ngebulana's assertions were wrong and ran contrary to the provisions of a written agreement of cession and pledge of shares.
In another bid to amend the impasse, Moti requested another meeting with Ngebulana for tomorrow to settle the matter and alleviate uncertainty for shareholders ahead of the AGM.
Ngebulana and Amatolo, through their PR Company, Lifa Communications, said they were aware of the statement issued by Moti, "which is devoid of any truth."
The company's Camilla Osborne said the matter between the Amatolo Trust and Moti was sub judice but they believed the Trust had a very strong case.
"The trust views the dispute over voting rights and share ownership as yet another opportunistic attempt by Mr Moti to receive undue benefit. The trust's legal advisors have engaged the CSDP and transfer secretaries on the matter, as the Amatolo Trust remains the registered owner of these shares and is therefore entitled to vote on them.
“The trust remains open to an amicable resolution of the dispute, but considering the underhanded tactics that have permeated our dealings to date, this seems unlikely," she said.
She added the Billion Group and the Amatolo Trust have created vast businesses over the past 15 years, creating over 12 000 jobs.
"As a 100% black-owned South African business, we are proud of our hard-earned track record that continues to inspire many black Africans who may have doubted themselves in the world of business. We will not be held ransom with tactics by someone whose questionable past is littered all over the internet," said Osborne.