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Gupta associates still battling for millions, score rare court victory

Ajay and Atul Gupta. Picture: African News Agency (ANA)

Ajay and Atul Gupta. Picture: African News Agency (ANA)

Published Jan 12, 2023


Johannesburg - Associates and companies linked to the fugitive controversial Gupta family continue to be embroiled in several legal battles in South Africa for assets worth hundreds of millions of rand.

Gupta associates – Ronica Ragavan, Ravindra Nath and Ashu Chawla, former chief executive officers of Oakbay Investments, Tegeta Exploration and Resources and Sahara Computers, respectively – are heading to the Supreme Court of Appeal (SCA) to challenge the powers of the companies’ business rescue practitioners (BRPs) Kurt Knoop, Johan Klopper and Juanito Damons to vote in creditors’ meetings.

The three are all directors of Tegeta Exploration & Resources, which is under business rescue, and want to be allowed to vote on behalf of another Gupta-owned firm Optimum Coal Terminal in meetings of its creditors.

Ragavan, Nath and Chawla also want to be able to exercise their vote upon receipt of a mandate in terms of an adopted business rescue plan of Tegeta Exploration and Resources, alternatively that its (Tegeta’s) BRPs may only exercise a vote at any creditors’ meeting held in terms of the Companies Act in respect of Optimum Coal Terminal upon receipt of Tegeta’s adopted business plan.

A year ago, the Gupta associates lost their bid to force out Tegeta’s BRPs after South Gauteng High Court Judge Margaret Victor dismissed their application with costs.

Ragavan, Nath and Chawla have now asked the SCA, which will hear arguments in the matter in March, to determine whether a company (Tegeta) in business rescue and is a creditor of another company also under business rescue and is its wholly owned subsidiary (Optimum Coal Terminal) does have the right to cast a vote on any matter in terms of the Companies Act.

The country’s second-highest court will also decide whether the right to vote vests with the parent company’s BRPs or its board of directors (which includes Ragavan, Nath and Chawla). Tegeta is a major creditor of Optimum Coal Terminal and owns 100% of its shares.

According to court papers, Optimum Coal Terminal’s sole asset is the 7.8% of shares in Richards Bay Coal Terminal, which are valued at hundreds of millions of rands.

In addition, Tegeta is owed more than R47 million by Optimum Coal Terminal, which is more than 25% of claims against the company, while Liberty Energy was the major creditor, claiming more than R95.5m and with 65% voting power at the creditors’ meeting.

Meanwhile, the Guptas scored a rare legal victory in the country at the South Gauteng High Court last month when Judge Leicester Adams overturned the denial by then City of Johannesburg member of the mayoral committee (MMC) for development planning, Funzela Ngobeni in August 2017 of their attempt to rezone their Saxonwold compound.

Instead, Ngobeni demanded that the Guptas submit amended/deviation building plans in accordance with the National Building Regulations and that they must show how the second and third-storey balconies will be screened off, therefore, limiting any over-looking into part of their compound in Saxonwold.

The Guptas bought the property in 2006 for R2.75m in cash through another of their companies Confident Concept. Judge Adams also dismissed the bid by the Guptas’ neighbour Martin and Sylvia Lewison and the Saxonwold and Parkwood Residents’ Association against the granting of the Confident Concept’s rezoning application and its approval.

He confirmed the approval of the rezoning of the Saxonwold compound by the municipal planning tribunal after Ngobeni upheld an appeal by the Lewisons and the association.

“The MMC (Ngobeni) also ignored the clear evidence that there would be no overlooking of the Lewison properly,” reads the judgment handed down on December 13.

Judge Adams said Ngobeni ignored a report by senior town planner David Mathinye, stating that the tribunal’s approval of the rezoning application “seemingly for no lawful reason”.

Sunday Independent