The business rescue practitioners of eight Gupta companies have approached the court to liquidate the family’s Oakbay Investments.
In the founding affidavit filed with the Johannesburg high court on Monday, Tegeta Exploration and Resources, which has been in business rescue for a year, said it is owed a total of R3.8m by Oakbay Investments.
Oakbay, a holding company that is owned and controlled by the Guptas, is not in business rescue — a provision of the Companies Act, which provides for the rehabilitation of a distressed entity.
The amount owed relates to a lease service agreement entered into between Tegeta and Oakbay, initiated in 2013, wherein Oakbay would pay the subsidiary R150,000 a month, excluding VAT, for office space and services. It was agreed the amount would increase by 10% every year.
Oakbay has, however, failed to pay what is due and has not replied to any of the notices demanding payment, joint business practitioner Kurt Knoop said in the affidavit.
Meanwhile Tegeta’s four companies — Optimum Coal Mine, Koornfontein Mines, Optimum Coal Terminal and Shiva Uranium — are all in business rescue and owe their creditors a collective R4bn.
At Optimum and Koornfontein mines, workers have not been paid since October.
Knoop said that, in terms of the Companies Act, Oakbay is deemed unable to pay its debt and is liable to be wound up. In fact, without banking facilities, “it is impossible to imagine that the respondent will ever again be able to transact as a business in SA”.
Tegeta and the other Gupta-linked businesses were placed into business rescue a year ago after all their banking facilities were closed and they were unable to transact.
The rescue process, intended to take three months, has been frustrated and delayed by a number of factors, including about 52 legal challenges brought against the practitioners in the past year. In many instances the legal challenges against the practitioners were from Oakbay Investments or other seemingly Gupta-affiliated entities or people.
According to Bouwer van Niekerk, lawyer for the rescue practitioners, liquidators have the power to convene an inquiry into the company in question and can subpoena anybody with any knowledge of the trade dealings, affairs and property of the company being liquidated.
Tegeta, as controlled by rescue practitioners, had previously applied to wind up Oakbay in September 2018 and claimed about R2m in fees. Oakbay first opposed the claim but then made the payment. The application was withdrawn, but Tegeta had not claimed the escalated fee as it was doing now.
“It is clear from the circumstances discussed that the respondent is not able to pay its debts when they are due,” said Knoop.
“It is now the second time that the applicant has had to resort to legal proceedings.”
Oakbay Investments did not immediately respond to an e-mailed request for comment.