On 9 March, Kruger and Co Attorney’s decided 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.
AUTHOR: Ruann Kruger on behalf of Kruger & Co Attorneys
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 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 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 20 March and one of these parties was Oakbay Investments, 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 20 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 19 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.