from NJABULO MKHIZE in Durban
DURBAN – RGS Group, battling for the control of Tongaat Hulett, has applauded the company shareholders for voting against debt-for-equity swap as a decisive victory for shareholder activism and corporate governance.
RGS Group believes the vote last Friday will benefit all Tongaat Hulett employees, creditors, stakeholders and South Africans in general.
The majority of shareholders of Tongaat Hulett, an agriculture and agri-processing business, focussing on the complementary feedstocks of sugarcane and maize, voted against the proposed debt-to-equity swap that would have handed a 97,3 percent controlling stake of the company to the Vision Group.
The Vision Group must now demonstrate its financial capability to implement the adopted business rescue plan as voted by the creditors of Tongaat Hulett.
Questions had been raised over Vision Group’s failure to meet the financial requirements outlined in the adopted business rescue plan, a condition that was integral to the proposed deal.
Aquil Rajahussen, RGS Group chairman, said: “Tongaat Hulett shareholders have sent a clear message that accountability, transparency, and adherence to the terms agreed-upon in the adopted business rescue plan are non-negotiable.”
He said as such, the rejection of the Vision Group’s attempt to secure a controlling stake in Tongaat Hulett without fulfilling its financial obligations signaled a broader win for all stakeholders involved, safeguarding the future of the company and the entire local sugar industry.
“We recognise that the road ahead may be challenging. However, the decision lays a strong foundation for the future, which will be rooted in strong corporate governance,” Rajahussen said.
RSG had earlier this year withdrawn from the bidding process for Tongaat Hulett after it was discovered that the company had allegedly submitted a fraudulent proof of funding letter on an Absa Mozambique letterhead to relevant authorities.
Notably, the South African sugar industry is valued at over R18 billion (US$992,1 million) per annum and supports more than 1 million people, including over 20 000 small-scale sugarcane farmers in KwaZulu-Natal.
– CAJ News
