Businessmen Litha Nyhonyha and Niven Pillay, the owners of Regiments Capital, are heading to court to set aside the liquidation of their financial advisory firm, says a Scorpio report on the Daily Maverick site.

In an urgent application, to be heard today, Nyhonyha and Pillay say they need a same-day court order to avoid a devastating tax bill that will ruin the company’s ability to pay creditors.

Regiments needs to get out of liquidation to allow its owners to complete an unbundling transaction that involves Capitec shares.

This unbundling deal, if not done by Tuesday, 17 November, will attract a R238m capital gains tax.

But, notes the report, Nyhonyha and Pillay face an uphill battle as Regiments’ provisional liquidators have countered that the liquidation should not be undone if there is to be regard for ‘commercial morality’ and ‘public interest’.

The liquidators accuse the two businessmen of trying to ‘clean out’ the company with a superficially attractive deal that allegedly stands to benefit them over a general body of creditors, both known and unknown.

Among key issues raised in court papers by the joint liquidators, Willem Venter and Kagiso Dinaka, are:

* That Regiments had not cited SARS as a party in its application even though the entire urgent court bid was geared at avoiding capital gains tax.

* That the company failed to disclose details of its potential exposure in a R144m lawsuit filed by the Department of International Relations and Co-operation against a joint venture in which it is involved.

* And, while Regiments attempts to set out a list of creditors, most of them linked to Pillay and Nyhonyha personally, not a single creditor claim has to date been proven as no meeting of creditors has been held. In fact, the Master of the High Court is yet to advertise the insolvent estate.

Scorpio says it has learnt that SARS intends to intervene in these proceedings, but was not able to confirm this at the time of publication.

Full Scorpio report on the Daily Maverick site