BUSINESS NEWS - Last week the Johannesburg High Court denied former Gupta company Westdawn’s attempt to stop publication of a revised business rescue plan for Optimum Coal Mine.
It’s a case of one former Gupta-owned company trying to liquidate another. Westdawn has a claim of more than R112 million against Optimum, and last week brought an urgent application before the high court to stop Optimum’s business rescue practitioners (BRPs) publishing a revised rescue plan on the grounds that the mine is factually and commercial insolvent, and that the BRPs acted with malice to thwart its winding up application.
Judge Raylene Keightley wasn’t buying it.
She could see no evidence of malice, nor did she grant the urgent order to stop publication of the rescue plan. However, the winding up application will be heard separately in November, while the business rescue process continues in parallel.
Bouwer van Niekerk, attorney for the BRPs, says the judgment means all creditors will now be given an opportunity to study and vote on the revised rescue plan. Creditors will vote on the revised plan on Monday, 28 September.
A total of eight Gupta companies were placed in business rescue in 2018 (though Westdawn was not one of them) after local commercial banks and Bank of Baroda withdrew banking facilities over suspicions of the Guptas’ involvement in state capture. The withdrawal of banking facilities prevented the Gupta companies from paying staff and creditors, forcing them into business rescue.
Westdawn provided mining services, labour and equipment to other companies in the group. In an affidavit before the court, joint liquidator Thea Lourens says prior to the business rescue of the various companies, Westdawn advanced R202 million to another Gupta company, Islandsite, which was used to acquire plant and equipment for mining at Optimum.
Westdawn originally applied for the winding up of Optimum in November 2019, but the matter was referred to the commercial court for hearing.
‘Apparent collusive dealings’
Lourens says in an affidavit that since then, new facts had come to light relating to “the apparent collusive dealings between the business rescue practitioners of Optimum and various affected parties in the estate to the general body of creditors …” and the inability of the BRPs to rescue the company either by selling its assets or resuming trading activities.
The BRPs opposed the liquidation attempt, saying it lacked merit and urgency. It has also asked the court to strike out “vexatious” allegations against the BRPs, who are under a statutory duty to publish a rescue plan and convene a creditors’ meeting – something they say Westdawn is trying to circumvent.
Said Optimum BRP Kurt Knoop in his replying affidavit: “Westdawn’s voting interest in relation to the business rescue plan is a mere 2.61%. This court would clearly want to know at the hearing of the winding up application what the attitude is of the remaining 97.39% of [Optimum’s] creditors in respect to the plan.”