Africa-Press – South-Africa. Business rescue practitioners of the Gupta-linked entities have all the legal powers to decide Optimum Coal Mine Terminal’s (OCT) business rescue plan, says the Supreme Court of Appeal (SCA).
The SCA made the ruling on Friday following a protracted dispute between business rescue practitioners (BRPs) and Gupta associates, on who has the right to vote on the business rescue plan.
The business rescue plan is a key condition in finalising the sale of the Optimum Coal Mine to Liberty Energy. But it hit a snag because of the insistence of the Tegeta Exploration and Energy, led by known Gupta associate Ronica Ragavan, that the its board must vote on it, despite the company being in voluntary business rescue.
Other OCT creditors have already voted overwhelmingly in favour of adopting the proposed business rescue plan.
But the Tegeta board is still fighting the business rescue plan and has tried numerous times to prevent the BRPs from convening the creditors’ meetings.
OTC has been under voluntary business rescue since February 2018. Tegeta, which is one of OCT’s creditors, was also placed under voluntary business rescue around the same time, alongside a string of other companies linked to the notorious Gupta family.
When the BRPs first published OCT’s business rescue plan, Tegeta directors wanted to vote too, arguing that as creditors, they had the rights even though the company was under business rescue. Tegeta BRPs have been arguing that they hold voting rights instead. The dispute over voting rights has been to the Gauteng High Court in Johannesburg, which ruled in favour of the BRPs. But the Tegeta refused to accept the High Court’s decision and took the matter to the SCA instead.
The SCA has now also ruled that Chapter 6 of the Companies Act installs the BRPs as the authority with full management powers and duties, in charge of the company and mandated to run it for the duration of the business rescue.
“Whilst [section] 66(1) of the Act confers original powers on the board to manage the business affairs of the company and to exercise all the company’s powers and perform its functions, it operates ‘except to the extent that the Act provides otherwise,” said the Bloemfontein Court, adding that a business rescue process is that exception.
The SCA dismissed Tegeta’s appeal, with costs. It also ordered Tegeta to pay the legal costs of the affected creditor, Liberty Energy, which opposed the appeal.
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