South Africa


Gupta Inc loses high court bid to block Optimum business rescue practitioners

From left: Atul Gupta. (Photo: Gallo Images / Financial Mail / Robert Tshabalala) | Tegeta’s Ronica Ragavan. (Photo: Gallo Images / Beeld / Felix Dlangamandla) | (Photo: Simon Dawson / Bloomberg via Getty Images)

Optimum Coal’s business rescue practitioners have scored an important win over the Guptas but they may still be forced back to court. That is if the NPA insists on an undertaking that they suspend implementation of the Optimum rescue plan until the State’s own applications for preservation order to secure the assets as the alleged proceeds of crime are dealt with. 

The business rescue practitioners (BRPs) of Optimum Coal scored a high court win over a Gupta bid to delay a creditors meeting that is aimed at pushing through a debt-to-equity takeover of the business. 

The directors of the Gupta-owned Tegeta Exploration and Resources — led by Ronica Ragavan — failed to convince the high court in Johannesburg that it is they who ought to vote on a rescue plan for Optimum Coal Terminal (OCT) and not the BRPs. 

And, so too that a business rescue plan for Tegeta, the company that owns the Optimum assets, should be in place before the OCT vote can happen. 

The ruling, handed down by Judge Margaret Victor on Tuesday, January 18 2021, does somewhat corner the National Prosecuting Authority as it impacts its own efforts to preserve Optimum ahead of forfeiture applications under the Prevention of Organised Crime Act (Poca).

This is because Tuesday’s order discharges an interim interdict the Tegeta directors obtained in November 2021 that has thus far prevented the BRPs from convening a section 151 creditors meeting.

This meeting is intended for creditors of OCT  — including Transnet — to vote on and approve the company’s business rescue plan. 

Adoption of this OCT plan is a vital requirement for finalisation of the rescue plan for Optimum Coal Mine (OCM). 

OCT is the entity that holds the Guptas’ lucrative stake in the Richards Bay Coal Terminal where coal exports are shipped from South Africa.

The OCT plan, once adopted, will pave the way for the takeover of the Optimum assets by Liberty Energy, a company controlled by Daniel McGowan, a former Gupta business partner who is based in Dubai. 

Daily Maverick previously published details of a R1-billion legal battle playing out in Bermuda between McGowan and the Guptas. 

The NPA believes the Liberty takeover deal will place the BRPs in contravention of money laundering laws under Poca. 

In handing down her ruling on Tuesday, Judge Victor was critical of the Gupta team’s introduction of a six-page letter that the State Attorney allegedly gave attorneys for the Tegeta directors.

Apart from the fact that the letter was not accompanied by a confirmatory affidavit from the author, it relates to the NPA’s own battles with the BRPs in terms of the preservation case.

The NPA matter, the court found, does not come into play in this particular case. 

The letter, attached to the court papers, detailed fairly rigid timelines for the undertaking the NPA allegedly seeks from the BRPs. 

It states that the NPA will launch an urgent interim preservation application within 48 hours of a ruling in the case — this is in the event the BRPs refuse to provide an undertaking that they would suspend the execution of the Optimum business rescue plan until such time as the NPA’s preservation case is dealt with.

It has also threatened to approach the court on “an extremely urgent basis” with an application to interdict the OCT 151 meeting should that become necessary. 

These measures, the letter suggest, is to safeguard the State’s position in respect of the two applications filed in December. 

The NPA’s case is that the Guptas had used the proceeds of crime — allegedly derived from Transnet, one of its pension funds, the TSDBF, and Eskom — to buy Optimum from commodity giant Glencor in 2015/2016. 

Liberty’s debt-to-equity takeover is borne out of a R1.3-billion creditor claim that the NPA, in its application, deems to be the proceeds of crime and the instrumentality of money laundering. 

Tegeta and Optimum are among several Gupta-owned companies that have been in voluntary business rescue since February 2018.

While business rescue proceedings are intended to be swift, a flood of litigation between the various rescuers of the Gupta-owned companies as well as the highly- intertwined nature of the various business, has caused it to be an incredibly drawn-out saga that has on occasion ended up at the Constitutional Court.

The Guptas left South Africa for Dubai as allegations of their alleged hand in  State Capture intensified in 2017. South African law enforcement applied for Inerpol Red Notices in respect of brothers Atul and Rajesh as well as their wives Chetali and Arti in connection with a criminal case in the Free State. Those applications remain pending. DM


Comments - Please in order to comment.

  • Coen Gous says:

    One battle won, but the war has only barely started

    • Coen Gous says:

      When I hear the name Gupta, my whole body start to shake and goes into uncontrollable revulsions. Asked my doctor, still practising at the age of 75 (part time), close to mine, and he said I must calm down, as a potential heart attack is around the corner. My answer: If there still is a Gupta or a Zuma around before it happens, my body simply will have to take the strain so I can help to fight this curse that has been bestowed upon us. He said: Take these pills Coen, it will help! And if you wish some of the good stuff (weed), just ask me, I am growing some in my garden for medicinal reasons.

  • Chris 123 says:

    So where’s this money to go to court coming from?

  • Nick Griffon says:

    I honestly do not understand how this mine is still owned by this criminal family.

    The asset forfeiture unit should have pounced on this years ago.

  • Hennie Visser says:

    Jessica, please contact me at as I might have some interesting facts for you regarding Molefe, Transnet, Richards Bay Coal Terminals, Optimum, and what I know transpired during the period 2012-2015 when major construction of infrastructure took place at the port of RBay gearing up for export of high grade quality coal to China.

Please peer review 3 community comments before your comment can be posted