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Court setback for Guptas

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Mine business rescue plan halted pending application

THE GUPTAS risk losing control of the affairs of their crown jewel, Optimum Coal Mine, after suffering another crushing blow when the high court in Pretoria halted its plans to put the mine into business rescue.

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Battle for Optimum Coal

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A campaign to unseat the business rescue practitioners running eight Gupta-owned companies is now being led by a newly created shelf company that is buying up other creditors’ invoices, court papers show.

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NUM in legal bid to remove ‘fraudulent’ Gupta business rescue duo

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The union’s lawyers allege the reason no bank wishes to assist them is that Klopper and Knoop have not been truthful about their independence.

In a statement released late on Friday afternoon, a legal firm contracted to the National Union of Mineworkers alleges that business rescue practitioners for eight Gupta-owned companies are actually illegally linked to the Guptas – and that is why no bank wants to assist them.

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Media Statement for immediate release, 9 March 2018

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Ruann Kruger on behalf of Kruger & Co Attorneys:

“On behalf of the National Union of Mineworkers, Kruger & Co Attorneys will be launching a court application to set aside the resolution taken by the directors of Optimum Coal Mine and to remove the business rescue practitioners who were appointed to administer the business rescue proceedings at Optimum. This application will be launched in order to act in the best interest of the National Union of Mineworkers and the 500 employees currently employed at Optimum who are members of the union and whom the union represents.

 

These practitioners are Johan Louis Klopper and Kurt Robert Knoop. The application will be submitted on the grounds that Knoop and Klopper were appointed unlawfully contrary to the provisions of the Companies Act of 2008, that everything they do now is unlawful and they are aware of this, and that they are not independent and were appointed as business rescue practitioners in eight other Gupta-linked companies during the exact same period as Optimum’s business rescue proceedings. Our client is seeking the appointment of a truly independent business rescue practitioner. In fact, in the case of Klopper, his appointment was simply fraudulent.

 

At a meeting between Knoop and Klopper and Optimum creditors which took place in Kempton Park on Tuesday, 6 March, Knoop and Klopper confirmed their appointment for business rescue for eight other Gupta-linked companies but denied “knowing” the shareholders or members of Gupta family despite evidence to contrary.

 

Optimum is being denied applications to open a bank account from major financial institutions due to the alleged ties between Knoop, Klopper and the shareholders of Gupta-linked companies. Without a bank account, the mine currently cannot remain operational which puts the income of hundreds of mine employees and various contractors at risk. This is why the mineworkers are therefore urgently seeking to approach the court for the appropriate relief to remove the current business rescue practitioners and to appoint alternative business rescue practitioners who will act independently and are not linked to Gupta shareholders or companies.

 

The current resolution taken by the directors of Optimum should be set aside and the practitioners be removed on the basis that the resolution taken by the directors to enter into business rescue is unlawful.  Section 129(2)(a) of the of the Companies Act of 2008 determines that a resolution to commence business rescue may not be adopted by the board of the company if liquidation proceedings have been initiated against the company, a fact that was conceded and admitted to by the practitioners on 6th March during the first  creditors meetings of Optimum Coal Mine.

 

The plea of the National Union of Mineworkers is that independent business rescue practitioners be appointed, who they can trust and will act in the best interest of all affected parties.”

Media Statement for immediate release, 22 March 2018

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Ruann Kruger on behalf of Kruger & Co Attorneys:

“As stated in a media release on 9th March, Kruger and Co Incorporated Attorney’s intended to launch a court Application on behalf of the National Union of Mineworkers to set aside the resolution taken by the directors of Optimum Coal Mine and to remove the business rescue practitioners who were appointed to administer Optimum’s business rescue proceedings.

 

In the course of the following week, our instruction changed and the Application was issued on behalf of one of Optimum’s creditors, Direko Mining and Exploration, after Kruger and Co Incorporated Attorneys received instruction from Direko, to launch the Application, for the same relief as in the initial application.

 

Our Application seeks for the current resolution taken by the directors of Optimum to be set aside on the basis that the resolution taken by the directors to enter into business rescue is unlawful.  Section 129(2)(a) of the of the Companies Act of 2008 determines that a resolution to commence business rescue may not be adopted by the board of the company if liquidation proceedings have been initiated against the company. We also seek to remove the appointed business rescue practitioners, Kurt Robert Knoop and Johan Louis Klopper, and ask that the court appoints independent business rescue practitioners that are not linked to any companies associated with the Guptas.

 

On 20 March 2018 the court found that the Application launched by Kruger & Co Incorporated Attorneys to remove the current business rescue practitioners of Optimum Coal mine, Mr Knoop and Klopper, was urgent. Various other creditors and effective parties Intervened to the proceedings on Tuesday and one of these parties was Oakbay Investments (Pty) Ltd, a 29 % shareholder of Tegeta, the shareholder of Optimum.

 

These Interventions by the Gupta companies have made it clear that the Gupta influence and the allegations questioning the independence of the appointed practitioners is not unfounded, and that this is a further ploy to delay and frustrate the outcome of the relief sought in the Application.

 

The Application was launched on the grounds that Knoop and Klopper were appointed unlawfully and in contravention of the provisions of the Companies Act of 2008, that everything they do now is unlawful, that they are aware of this and that they are not independent and were appointed as business rescue practitioners in eight other Gupta-linked companies during the exact same period as Optimum’s business rescue proceedings.

 

The court further ordered on Tuesday, 20th March that the current business rescue practitioners may not pay any further historic debt that was due prior to the filing of the resolution for business rescue that was done on 19th February 2018. Furthermore, no assets of Optimum may be disposed of pending finalization of the Application, except the sale of assets in the normal cause of business operations at the mine.

 

The parties will approach the Deputy Judge President for direction on a special allocation of this matter in the light of the urgency and all the further affected parties who have intervened in these proceedings.

 

Up until the Application was launched and recognised by the Court as urgent, Optimum’s appointed practitioners were denied applications to open a bank account from major financial institutions due to the alleged ties between Knoop, Klopper and the shareholders of Gupta-linked companies. Without a bank account, the mine would not be able to remain operational which puts the income of hundreds of mine employees and various contractors at risk. Our  Application and the Court’s ruling has now resulted in at least one major South African bank stating that they are open to discussions around facilitating a bank account for Optimum, on condition that alternative practitioners are appointed, who are not linked to the Gupta family.

 

The application is fully supported and endorsed by OUTA who have this in writing. OUTA stated that they endorse the relief sought in the notice of the motion as well as the appointment of independent business rescue practitioners.”