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S African court rules in favour of Optimum rescuers

13 Apr 2018, 2.29 pm GMT

S African court rules in favour of Optimum rescuers

Cape Town, 13 April (Argus) — South Africa's High Court today ordered eight Gupta-owned firms — including the management of the Optimum and Koornfontein mines — to allow business rescue practitioners access to their premises.

Business rescuers Louis Klopper and Kurt Knoop lodged an urgent request with the court after being barred from the rescue entities' shared premises on 5 April.

Gupta-owned Oakbay Investments, the holding company of the eight rescue entities, is also headquartered at the premises. The firms entered business rescue in February after their owners, the India-born Gupta family, fled the country to avoid corruption charges. At the time, Knoop and Klopper were appointed business rescuers of all eight.

In their motion, the rescuers said they were being refused access except by appointment and have to make written requests to obtain documents, which is only granted to the extent that management suggests "is reasonable in the circumstances".

Klopper and Knoop said this was preventing them from performing their duties and finalising business rescue plans for submission to creditors.

Meetings between the rescuers and existing management were required at the premises almost on a daily basis, according to their motion. Documents, including invoices, management accounts and human resources records are processed at the premises and all significant operations and executive decisions, including prioritising critical payments, are taken at the premises, their motion stated.

The main complaint of the Gupta-owned firms was that the right to privacy of the Oakbay Group, which is not in business rescue, would be compromised if the rescuers had access to the premises without prior arrangement.

But by law, business rescue practitioners have full management control of a company under their supervision, in place of the board and pre-exiting management, the judge pointed out. As such, the practitioner must involve himself in the day-to-day management of the firm and total management powers and duties fall to the practitioner, she added.

If this involves close and regular attendance at the business premises of the company, then this must be done, the judge said. "He has free rein to adopt any management, oversight and control functions which he thinks appropriate to the carrying out of his duties. If he abuses his office, he can be removed by the court on application by an interested person."

Consequently, the Gauteng division of the court ordered the Gupta-owned firms to provide the rescuers unrestricted access to the premises and to co-operate with them in the performance of their duties. They were also ordered to pay the full legal costs.

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