Fraud investigation rocks Tongaat Hulett takeover bid

The Tongaat Hulett Refinery in South Coast Road based in the South Durban Industrial Basin. Picture: File

The Tongaat Hulett Refinery in South Coast Road based in the South Durban Industrial Basin. Picture: File

Published Apr 3, 2024


RGS Group Holdings, the unsuccessful bidder in the Tongaat Hulett takeover, faces a fraud investigation by the SAPS.

The group’s involvement in fraudulent activities during the bidding process and subsequent litigation, as Tongaat Hulett sought a strategic economic partner, has come under scrutiny.

Tongaat Hulett has been under business rescue for years.

The successful bidder, Vision Investments 155, is mainly owned by Robert Gumede, a well-known South African business mogul, and Zimbabwean business mogul Rute Moyo.

The criminal complaint was opened by a director of the company, Moyo. The Star has obtained an exclusive copy of the criminal complaint, which spans hundreds of pages. Mozambique RGS and Vision submitted competitive plans to take over the business and debt of Tongaat. Thousands of jobs, mainly those of small-scale sugarcane farmers in KwaZulu-Natal, were at stake.

During the bidding process, RGS submitted fraudulent proof of funding, unbeknown to financial institutions, Tongaat Hulett’s business rescue practitioners, and Vision. However, RGS surprisingly at the time, withdrew from the race on January 9, a day before the institutions had to vote on which plan they accepted.

“We were suspicious of RGS withdrawing their plan. When Vision was later served with a rather poor urgent application by a creditor in Tongaat, Mohini Singari Naidoo, t/a Powertrans Sales and Services, we were convinced that this was a stalking horse for RGS.

“We were not surprised when RGS filed an application to intervene. We were not prepared for the contents of their application though,” Ian Small-Smith the lawyer for Vision in the criminal matter, said to The Star.

In the intervention application, Momade Acquil Rajahussein, the executive chairperson and owner of RGS, conceded that RGS supplied a fraudulent letter of funding, but blamed it on “a junior manager of RGS who had been instructed to make the R2  billion deposit into the Absa Mozambique account”. He stated that this junior employee took it upon himself to obtain this fraudulent letter of funding without the knowledge of “senior management of RGS” and that this fraudulent letter was then circulated to other parties as if the contents were correct.

According to Rajahussein, senior management of RGS only became aware of the fraud on December 15, 2023 when Absa South Africa confronted them.

Small-Smith said: “We doubt this very much. The first word we heard of this was in February 2024 when RGS disclosed their version of a watered-down fraud, they say committed by an undisclosed junior employee. It cannot be true that ABSA South Africa would have known about this fraud for two months without disclosing it to the other institutions, the business rescue practitioners and Vision. Let the police investigate the matter fully to establish the true circumstances around the fraud that RGS admits to.”

This is a developing story and comments from RGS, ABSA South Africa, the lawyers of RGS and the advisors were not available at the time of publication.

The Star

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