SCA stops Gupta firms’ rescue termination bid
Two Gupta-owned companies are back in business rescue after the SCA overruled moves to terminate the process.
The Citizen reports in 2018, eight of the Gupta family’s companies were placed in voluntary business rescue after the country’s banks closed their accounts.
Kurt Knoop and Johan-Louis Klopper were appointed as business rescue practitioners (BRPs) for a number of those companies, including Islandsite Investment and Confident Concept. But after their relationship with Oakbay Investments – the holding company for the Guptas’ businesses in SA – turned sour, Chetali Gupta (Atul Gupta’s wife and a shareholder in both companies) went to the Gauteng High Court (Pretoria) and got an order for Knoop and Klopper to be removed.
They were subsequently removed and two new BRPs were appointed to replace them.
And last month, the new BRPs moved to terminate the business rescue processes under way at both Islandsite Investments and Confident Concept.
Last week, however, the SCA reinstated the suspension of the removal order. And it declared the removal of Knoop and Klopper – together with the appointment of the new BRPs and the notices of termination of business rescue they had issued – invalid, pending the finalisation of the matter.
Judge Malcolm Wallis wrote the SCA’s ruling – and he highlighted that the High Court had declined to suspend its special execution order without being asked to, or having heard, arguments.
According to The Citizen report, Wallis said the Superior Courts Act was ‘clear and emphatic’.
He said: ‘An execution order is suspended pending an urgent appeal by the aggrieved party.’
Wallis found the High Court had ‘no power and no authority’ to make the decision it did and described it as inexplicable.
‘The order was void. The correct position is therefore that the “termination” of the business rescue of these two companies was effected by two people who were not the BRPs duly appointed and in office at the time,’ he said.
‘They had no right or power to terminate the business rescue, however much they may have believed that they did. The termination was accordingly invalid and void,’ Wallis added.
He ruled that Islandsite and Confident Concept would remain in business rescue – under the supervision of Knoop and Klopper – until the matter was finalised.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
