{"id":28458,"date":"2023-12-13T06:00:00","date_gmt":"2023-12-13T04:00:00","guid":{"rendered":"https:\/\/amabhungane.org\/?p=28458"},"modified":"2024-09-11T14:59:18","modified_gmt":"2024-09-11T14:59:18","slug":"analysis-who-is-behind-the-tongaat-hulett-bid-battle","status":"publish","type":"post","link":"https:\/\/further.co.za\/amabwp\/analysis-who-is-behind-the-tongaat-hulett-bid-battle\/","title":{"rendered":"Analysis: Who is behind the Tongaat Hulett bid battle?"},"content":{"rendered":"\n

Things have been sour for sugar giant Tongaat Hulett since 2019, when a new management team uncovered accounting failures and alleged fraud that led to a R12-billion reversal in the company\u2019s valuation.<\/p>\n\n\n\n

The criminal trial of key former directors is yet to get properly underway.<\/p>\n\n\n\n

With a group of banks holding the company over a barrel of debt, there have been increasingly desperate efforts at keeping alive a business that supports thousands of jobs, especially in KwaZulu Natal.<\/p>\n\n\n\n

What has emerged and is of particular concern is the opaque nature of the various deals cooked up between management, the lender banks, state funders such as the Industrial Development Corporation (IDC) and the Public Investment Corporation (PIC), as well as, latterly, the business rescue practitioners (BRP\u2019s).<\/p>\n\n\n\n

<\/div>\n\n\n\n

The failed Rudland gambit<\/strong><\/p>\n\n\n\n

First, there was the attempt<\/a> in early 2022 by Tongaat Hulett management to hand control of the company to the controversial Rudland family of Zimbabwe. That attempt was abandoned following disclosures by amaBhungane<\/a> and the Takeover Regulation Panel<\/a> that linked tobacco mogul Simon Rudland to the deal.<\/p>\n\n\n\n

Incredibly, banks and lawyers for the deal gave it a clean bill of health.<\/p>\n\n\n\n

Rudland has since been singled out in the Al Jazeera \u201cGold Mafia\u201d expos\u00e9 <\/a>as one of the alleged kingpins of a Zimbabwean money laundering and gold smuggling network, though he has denied this and threatened to sue Al Jazeera.<\/p>\n\n\n\n

Following the collapse of the Rudland deal, Tongaat Hulett was placed in voluntary business rescue while the BRPs sought a buyer who could inject enough cash to keep the banks (who were still owed about R7-billion) at bay.<\/p>\n\n\n\n

But the Rudland experience \u2013 and the fact that sugar is known in the region as a risk commodity for trade-based money laundering \u2013 suggests a need for close scrutiny of anyone seeking control of such a strategic company.\u00a0\u00a0<\/p>\n\n\n\n

<\/div>\n\n\n\n

Preferred Bidder<\/strong><\/p>\n\n\n\n

In July the BRP\u2019s announced the preferred bidder: Kagera Sugar, a little-known Tanzanian producer run by multi-millionaire brothers Seif Ali Seif and Nassor Seif which had submitted a R3.56-billion bid.<\/p>\n\n\n\n

There followed a furious lobbying and media campaign<\/a>, by two other bidders in particular.<\/p>\n\n\n\n

One was the Zimbabwean Sovereign Wealth fund, which falls under the ministry of finance where President Emmerson Mnangagwa\u2019s son Kudakwashe (34) has been appointed deputy minister. The fund had attempted to make a bid for Tongaat\u2019s Zimbabwe assets, but was rebuffed by the BRP\u2019s, who did not want to break up the company whose Botswana, Mozambique and Zimbabwe sugar operations are not financially distressed.<\/p>\n\n\n\n

Indeed, part of the parent company\u2019s woes stem from its inability to access profits from Zimbabwe because of the country\u2019s exchange control restrictions, and sugar industry insiders say vultures are still circling trying to pick up the Zimbabwean assets for next-to-nothing.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Blurry Vision<\/strong><\/p>\n\n\n\n

The other party aggrieved by the selection of Kagera was the Vision consortium (previously dubbed the Terris consortium), a rival bidder characterised by various somewhat opaque offshore constituents, although its lawyers say there is nothing unusual about this.<\/p>\n\n\n\n

Vision\u2019s front man in South Africa is IT mogul Robert Gumede, represented via Guma Agri and Food Security Ltd (Mauritius).<\/p>\n\n\n\n

Alongside Guma in the consortium is Amre Youness\u2019s Terris AgriPro, also registered in Mauritius, which is owned by the Terris Fund SPC registered in the Bahamas, of which, the lawyers disclose, Youness is the ultimate beneficial owner.<\/p>\n\n\n\n

Youness, notably, was a longtime consultant to three central Asian oligarchs: Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, also known as the Trio, and at the time served as chair of two of their South African investments, Shaftsinkers and Samancor Chrome, held through their investment company International Mineral Resources BV (IMR).<\/p>\n\n\n\n

One of the Trio\u2019s more significant brushes with notoriety came via the London listing of, and subsequent investigations into, their commodities group: Eurasian Natural Resources Corporation (ENRC).<\/p>\n\n\n\n

Both the listing and the investigations eventually came to naught, but some flavour of the frisson surrounding ENRC and its founders is provided by a Financial Times investigation<\/a> into the mysterious deaths of three South Africans.<\/p>\n\n\n\n

Youness, through the consortium\u2019s lawyer, insisted that IMR Management Services (IMSL) where he was for a time the chief executive, was a completely separate and distinct entity and acted only as a corporate advisor to International Mineral Resources BV in a consulting capacity.<\/p>\n\n\n\n

\u201cMr. Youness had zero involvement with any of these allegations\u2026 Raking up and relying on outdated, unverified, and unproved allegations against the ENRC principal shareholders, in order to cast doubt on Mr. Youness\u2019 character, is unfair and unprofessional.\u201d<\/p>\n\n\n\n

The technical partner in the consortium, Pakistan\u2019s Almoiz Industries, was slammed by a Pakistan Sugar Inquiry Commission report in May 2020, which accused the company \u2013 among others in the nation\u2019s so-called \u201csugar mafia\u201d \u2013 of cheating both farmers and the tax authorities. The consortium’s lawyer alleges these allegations were politically motivated and says they came to nothing.<\/p>\n\n\n\n

Undisclosed Zimbabwean interests are represented by Mauritian company Remoggo PCC, described as an investment holding firm with a portfolio of investments in Zimbabwe and the region. Rutenhuro Moyo is the Managing Partner at Remoggo and has served on the board of Tongaat Hulett\u2019s Zimbabwe subsidiary Hippo Valley Estates since 1 August 2020.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Kagera blocked<\/strong><\/p>\n\n\n\n

Following the nod for Kagera, the Vision group wrote<\/a> to the BRPs objecting to the decision and also to the IDC, which it accused of favouring Kagera with funding while refusing to consider Vision.<\/p>\n\n\n\n

The IDC was persuaded to conduct an internal inquiry, which led to a senior executive resigning, allegedly for approving a funding commitment for Kagera without the necessary authority.<\/p>\n\n\n\n

By October, Kagera appeared to be struggling to raise finance and a new name appeared: the Mozambican family owned RGS Group, which reportedly submitted a R6-billion bid, almost double that of the preferred buyer.    <\/p>\n\n\n\n

That left the process somewhat in limbo, until a City Press<\/em> article<\/a> on 5 November trumpeted, “Robert Gumede’s consortium takes control of Tongaat Hulett\u201d.<\/em><\/p>\n\n\n\n

The story suggested that Vision had outsmarted everyone by doing a deal directly with the lender group of banks by buying Tongaat Hulett\u2019s debt (at a discount) in order to assume a controlling position as the largest creditor.<\/p>\n\n\n\n

This would effectively block everyone else because Vision\/Terris would have the majority vote at the creditors meeting to approve the business rescue plan.<\/p>\n\n\n\n

\u201cTerris Sugar now holds over 80% of creditors\u2019 votes and any bidding company only required 75% of the votes to succeed. It will still inject the R3.6 billion required for the company\u2019s assets,\u201d the paper proclaimed.<\/p>\n\n\n\n

It seemed the deal was sewn up.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Not so fast<\/strong><\/p>\n\n\n\n

However, to clinch the deal Vision had to come up with the money.<\/p>\n\n\n\n

We know from subsequent court papers that on 3 November the Lender Group notified the BRP\u2019s that they had reached agreement with the Vision parties. This transaction was seemingly never consummated. A new agreement on 20 November 2023 apparently made provision for payment to be made by Vision to the banks by no later than Wednesday 6 December.<\/p>\n\n\n\n

That was two days before the date announced by the BRP\u2019s \u2013 Friday 8 December \u2013 on which creditors would have to vote for one of two rescue plans for Tongaat Hulett: that of Vision\/Terris or the competing offer of Mozambique\u2019s RGS, owned by the powerful Gulamo family.<\/p>\n\n\n\n

As of Thursday morning on 7 December, the advocate appearing in the Durban high court on behalf of Vision was forced to tell Judge Rashid Vahed that no money had been paid to the banks.<\/p>\n\n\n\n

He was eager to assure the court \u2013 and a courtroom full of opposing lawyers \u2013 that the money was \u201cstill available\u201d and that Vision\u2019s bid was still on the table. No payment had been made, he tried to suggest, because of what he termed the current \u201cuncertainties\u201d.<\/p>\n\n\n\n

But what were these \u201cuncertainties\u201d and how did they end up in front of Judge Vahed?<\/p>\n\n\n\n

To understand that we need to take a step back and examine how the South African sugar industry is regulated.<\/p>\n\n\n\n

<\/div>\n\n\n\n

SASA and the Sugar Industry Agreement<\/strong><\/p>\n\n\n\n

Sugar production is important to the South African economy. Evidence before court was that the industry generates in excess of R18-billion annually and creates between 65 000 and 85 000 direct jobs, along with 350 000 indirect jobs.<\/p>\n\n\n\n

As Judge Vahed noted, sugar is particularly significant for the rural areas where cane is grown and local economies are boosted by the proximity of sugar mills and the infrastructural support they bring.<\/p>\n\n\n\n

Because sustaining the sugar industry is a matter of national importance, the South African Sugar Association (SASA) has been given statutory recognition and powers via the Sugar Act and the Sugar Industry Agreement.<\/p>\n\n\n\n

Sugar is globally oversupplied and South Africa is vulnerable to dumping by international producers \u2013 the import of cheap sugar at prices that undercut the price at which the local industry can viably produce.<\/p>\n\n\n\n

To counter this threat the government imposes anti-dumping duties on imported sugar in order to shield domestic producers.<\/p>\n\n\n\n

In addition, the Sugar Industry Agreement creates a revenue-sharing regime through which local sugar production is regulated.<\/p>\n\n\n\n

As the judge highlighted, \u201cThe revenue-sharing arrangement is based on the central and overarching principle that the growers, the millers, and the refiners should all benefit from an equitable division of the proceeds of the domestic market, and all be insulated against the risk of the export market.\u201d<\/p>\n\n\n\n

<\/div>\n\n\n\n

The overproducer<\/strong><\/p>\n\n\n\n

Tongaat Hulett is an overproducer against its regulated quota and must pay into the general fund for redistribution to other growers, millers and refiners.<\/p>\n\n\n\n

The internal transfers that are managed by SASA can be large.<\/p>\n\n\n\n

Around the time it was placed in business rescue, Tongaat Hulett received an assessment of levies from SASA amounting to more than R400-million.<\/p>\n\n\n\n

It did not pay.<\/p>\n\n\n\n

Following the institution of business rescue, the BRP\u2019s took the view that they were entitled in law to suspend these payments, and so the bill owed by Tongaat Hulett has grown to almost R2-billion according to SASA (although this figure may be subject to dispute).<\/p>\n\n\n\n

These debts have a knock-on effect in the industry. In court papers another large producer, Illovo Sugar, said that Tongaat Hulett\u2019s non-payment had, as of 31 March 2023, caused lllovo to suffer a loss of R153-million.<\/p>\n\n\n\n

Illovo told the court, \u201cThe threat of non-payment by THL [Tongaat Hulett Ltd] is even more immediate and serious for smaller millers and growers\u2026 [the] business rescue plans refer to the human and social catastrophe\u2026 if THL is placed into immediate liquidation\u2026 The elephant in the room is the greater human and social catastrophe that will be caused by THL if it again fails to pay its redistribution obligations which will drive the entire sector into ruin, beginning with small scale growers.\u201d<\/p>\n\n\n\n

<\/div>\n\n\n\n

Litigation<\/strong><\/p>\n\n\n\n

The industry was so concerned about Tongaat Hulett\u2019s non-payment that in June this year another big player, RCL Foods, lodged an urgent interdict to stop the business rescue practitioners from convening a meeting of creditors to consider the rescue plan that was then on the table because it did not make provision for the outstanding levies to be recovered.<\/p>\n\n\n\n

That interdict was withdrawn only because the BRP\u2019s postponed the creditors meeting and promised to pursue a high court ruling on whether, as they claimed, the business rescue provisions of the Companies Act allowed them to suspend payments and treat SASA as just another unsecured creditor which might get paid a few cents to the rand when the business was finally sold or liquidated.<\/p>\n\n\n\n

That issue ended up before Judge Vahed. On 29 November, by agreement with the parties, he handed down a one line ruling dismissing the BRP\u2019s case with costs and giving notice that the full judgment would be handed down on Monday 4 December 2023.<\/p>\n\n\n\n

The urgency to obtain clarity on whether Tongaat Hulett was entitled to withhold those levies was based on a deadline set by the creditors for the business rescue plans to be published by 29 November, in order to ensure that a vote on these plans could be held by Friday 8 December.<\/p>\n\n\n\n

The ruling should have given the BRP\u2019s pause, despite the absence of a full judgment.<\/p>\n\n\n\n

Potentially it instantly punched an extra R2-billion hole in Tongaat Hulett\u2019s balance sheet and called into question the business rescue process. <\/p>\n\n\n\n

Instead, the practitioners published two plans \u2013 the Vision plan and the RGS plan \u2013 in which they maintained that the court was wrong to dismiss their application and that they intended to appeal.<\/p>\n\n\n\n

<\/div>\n\n\n\n

A damning judgment<\/strong><\/p>\n\n\n\n

When the full judgment was published on 4 December it eviscerated the BRP\u2019s case.<\/p>\n\n\n\n

It found Tongaat Hulett\u2019s obligations to SASA were statutory (derived from law) not contractual, and therefore could not be suspended by business rescue. \u201cTo put it bluntly: if a company cannot comply with its statutory obligations, then it cannot be rescued and must seek liquidation.”<\/p>\n\n\n\n

Judge Vahed found that, given that payments had been suspended in breach of the legal obligations, SASA must receive preference (priority) in the business rescue: \u201cThis is a consideration which the practitioners ought to take into account when determining whether the business is capable of rescue or whether a better return will result in liquidation.”<\/p>\n\n\n\n

Given this ruling, RCL Foods and SASA launched urgent applications to stop the creditors\u2019 planned Friday 8 December vote in favour of the Vision or RGS business plans.<\/p>\n\n\n\n

In court papers they argued that both plans put forward by the BRP\u2019s were unlawful in that they did not recognise and encompass the statutory obligations towards SASA.<\/p>\n\n\n\n

At an urgent hearing in front of Judge Vahed on Thursday morning, counsel for the BRP\u2019s agreed the vote would have to be postponed, but only until Thursday 14 December, because the Industrial Development Corporation, which has been funding the business rescue, was going to shut off the taps.<\/p>\n\n\n\n

The interdict will now be argued on Wednesday 13 December and Vahed will have to give a snap judgment on whether the vote can go ahead the next day.<\/p>\n\n\n\n

Meanwhile the swirl of questions around the players and process is only getting louder.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Questions for the BRP\u2019s<\/strong><\/p>\n\n\n\n

The Mozambican bidder, RGS, has delivered an extraordinary series of allegations, in effect accusing the BRP\u2019s of manipulating the rescue process (see main story here<\/a>).<\/p>\n\n\n\n

But RGS is not the only critical voice. <\/p>\n\n\n\n

In its urgent interdict to stop the vote, RCL Foods was scathing about the BRP\u2019s decision to publish the two rescue plans despite Vahed\u2019s judgment.<\/p>\n\n\n\n

RCL stated, \u201cQuite apart from demonstrating an alarming contempt for the order, this attitude demonstrates an unwarranted degree of arrogance on the part of the practitioners or those entities who may be driving the business rescue process, be they the lender group\u2026 or the competing bidders under the two plans.\u201d<\/p>\n\n\n\n

It noted that even before receiving the full judgment the BRP\u2019s expressed the opinion they were still entitled to suspend the statutory obligations: \u201dTheir belief or opinion is legally irrelevant, and their willingness to conduct themselves by privileging their opinion over an order of court Is wilful self-help, which our courts have repeatedly deprecated.\u201d<\/p>\n\n\n\n

By this RCL meant the BRP\u2019s were endeavouring to go ahead and make an omelette that could not later be unscrambled.<\/p>\n\n\n\n

In their provisional answer (both sides will file more complete papers ahead of argument on 13 December) BRP representative Gerhard Albertyn said they still believed the proposed rescue plans were lawful and viable.<\/p>\n\n\n\n

\u201cTheir terms and\/or implementation will not cause SASA or RCL irreparable harm\u2026\u00a0 On the contrary, preventing\u2026 the vote\u2026 will likely lead to THL’s liquidation \u2014 laying to waste all the work done and the money expended in the business rescue, and redounding to the permanent and unjustifiable prejudice of THL, its creditors, employees. shareholders and other affected persons, as well as the sugar industry and the public at large.\u201d<\/p>\n\n\n\n

<\/div>\n\n\n\n

Rather liquidate?<\/strong><\/p>\n\n\n\n

However, in an affidavit in support of RCL Foods Illovo Sugar took aim at the business rescue outcomes, pointing out that Tongaat Hulett’s liabilities have increased by over R3-billion in 6 months.<\/p>\n\n\n\n

\u201cTHL’s state of insolvency is rapidly increasing,\u201d Illovo alleged.<\/p>\n\n\n\n

It noted that according to the first business rescue plan published by the BRP\u2019s on 31 May
2023, Tongaat Hulett had assets to the value of R5.897 billion and liabilities in the amount of R9.882 billion as of 30 April 2023.<\/p>\n\n\n\n

Now, according to the RGS and Vision plans published at the end of November, liabilities as of 31 October 2023 have increased to R13.059 billion, while there has been no increase in the value of the assets.\u00a0<\/p>\n\n\n\n

Notably, this deterioration flowed from Tongaat Hulett’s debt to the IDC for loans made since the commencement of the business rescue. This had increased from R613 million to R2.118 billion.<\/p>\n\n\n\n

The other major liability was indebtedness to SASA, which had grown to R1.6-billion according to figures contained in the rescue plans.<\/p>\n\n\n\n

Illovo said there were still many regulatory, procedural and financing hurdles: \u201cThe business rescue proceedings therefore may continue for many months, or even years.\u201d<\/p>\n\n\n\n

Illovo alleged there was a real risk that Tongaat Hulett might be unable or unwilling to pay the outstanding industry levies, and that \u201cthe harm that this would cause to participants in the sugar industry will certainly be irrecoverable, and may, for many of the participants in the industry be irreparable.\u201d<\/p>\n\n\n\n

On the other hand, Illovo argued that if Tongaat Hulett were to be liquidated, its productive capacity would be taken over by a new miller who would immediately be required to honour any new redistribution payments: \u201cThat scenario would be infinitely preferable to the sugar industry as a whole than the “business rescue” process envisaged, in respect of which ongoing obligations heap up with no realistic prospect of being discharged, to the catastrophic prejudice of the industry as a whole and to the benefit only of THL’s secured lenders.\u201d<\/p>\n\n\n\n

In its replying affidavit the Sugar Association was unequivocal: the BRP\u2019s decision to suspend payments to SASA was ruled unlawful by Judge Vahed, which in turn rendered the business plans unlawful. SASA must be paid, finished and klaar<\/em>.<\/p>\n\n\n\n

SASA also took aim at the banks, stating: \u201cIt appears that the proposed business plans are focused on the rights and interests of the Lender Group, not all creditors.<\/p>\n\n\n\n

“First and foremost as consistently stated, a vote cannot take place on an unlawful plan. Second, it is not SASA or RCL that is pushing THL into liquidation it is the Lender Group that are doing this.<\/p>\n\n\n\n

\u201cThat is because they insist on payment of their debts to the detriment of the entire sugar industry, not just THL. In effect this statement seeks to hold SASA hostage: SASA must forego its statutory rights in favour of the Lender Group’s contractual rights or be branded as the cause of THL’s liquidation. This is factually unsustainable and legally untenable.\u201d<\/p>\n\n\n\n

<\/div>\n\n\n\n

Some unresolved questions about Vision<\/strong><\/p>\n\n\n\n

While Amre Youness from Terris has distanced himself from any negative association with the Kazakh oligarchs, his own responsiveness to allegations of corporate manipulation has been called into question.<\/p>\n\n\n\n

His name came up in a 2019 case lodged by the Association of Mining and Construction Union (AMCU), in which Youness was cited as the Third Respondent, with Samancor being the main target.<\/p>\n\n\n\n

In that case, a former Samancor director turned whisleblower, Miodrag Kon, described various ways in which money was allegedly siphoned out of Samancor to the detriment of the company and minority shareholders, including via \u201cmarketing fees\u201d paid into an offshore entity called Samchrome in which a former shareholder allegedly had a beneficial interest.<\/p>\n\n\n\n

In his affidavit, Kon states that \u201cin 2006, I started to be uncomfortable with what was going on at the company\u2026 I approached Ahmed Youness\u2026 [from IMR] questioning Samancor\u2019s and their own disadvantageous relations with Samchrome Ltd Malta.\u201d<\/p>\n\n\n\n

Kon attested, \u201cAs a manager of shareholder relations, I travelled to London for a meeting with the Chair of the Board, Mr Youness\u2026 Mr Youness told me at the meeting that he already knew that [the former shareholder] had taken out \u201c500 million dollars\u201d\u2026 I saw no action taken by Mr Youness after this meeting.\u201d<\/p>\n\n\n\n

The payment of marketing fees was later transferred to another company, Samchrome FZE Dubai.<\/p>\n\n\n\n

Kon stated, \u201cIt is my understanding that Samchrome FZE Dubai continues to provide marketing services to Samancor on the same or similar terms. I believe this is to the prejudice of Samancor\u2019s minority shareholders as 9% is far too high a fee for the services actually rendered.\u201d<\/p>\n\n\n\n

The lawyer for the Vision\/Terris consortium pointed out that the papers were never served on Youness and that he never had an opportunity to rebut the allegations because this lawsuit was withdrawn.<\/p>\n\n\n\n

The suit was terminated in response to an agreement by Samancor in July 2021 to appoint audit firm BDO to conduct an investigation.  BDO found no wrongdoing, but its confidential report is still the subject of litigation by AMCU.<\/p>\n\n\n\n

The consortium lawyer said that \u201cMr. Youness has no knowledge of the BDO report or of the status of the agreement with AMCU. Mr. Youness has no knowledge of Mr. Kon\u2019s allegations, all of which took place long before Mr. Youness was involved. Mr. Youness had no involvement in the creation of the marketing agreement\u2026 However, it is worth noting that a margin of 9% is nothing more than a complete fantasy. The typical net profit margin of a trading business is closer to 1%, which was the case for Samchrome.\u201d<\/p>\n\n\n\n

She added: \u201cYour determination to smear Mr. Youness is unprofessional and defamatory. Mr Youness is a respected international investor who is part of a consortium that is seeking to save a major South African corporation.\u201d<\/p>\n\n\n\n

<\/div>\n\n\n\n

And Almoiz, Vision\u2019s technical partner<\/strong><\/strong><\/p>\n\n\n\n

On the face of it, the Pakistani Sugar Commission report is pretty damning, but the lawyer for the Vision consortium told us that \u201cnothing ever came out of the commission. It was widely criticized for being politically motivated, flawed and lacking credibility\u2026 No convictions (even against the targeted political group) were ever achieved, and not a single charge was formally leveled against any other party, let alone Almoiz.\u201d<\/p>\n\n\n\n

She said that the World Bank\u2019s compliance arm has carried out its independent diligence on the Sugar Commission allegations and concluded that not only could it continue to collaborate with Almoiz, but that it would also proactively work to expand its relationship with the Group.<\/p>\n\n\n\n

The report did, however, produce some action.<\/p>\n\n\n\n

The Competition Commission of Pakistan (CCP) conducted raids at the Pakistan Sugar Mills Association (PSMA) and imposed penalties totalling Rs44 billion on the PSMA and its member sugar mills \u2013 including Almoiz \u2013 for their alleged involvement in cartelisation.<\/p>\n\n\n\n

\u201cCartelisation in the sugar industry appears to be compulsive or pathological where players collude and engage in collusive practices as a means to an end,\u201d the majority wrote in the infringement decision.<\/p>\n\n\n\n

The finalisation of this case has been delayed by the failure to appoint a chair of Pakistan\u2019s Competition Appellate Tribunal, but this has recently been remedied and the Tribunal has announced it will be hearing the case.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Finally, questions about the other bidder: Mozambique\u2019s RGS<\/strong><\/p>\n\n\n\n

Perhaps most notoriously, the Gulamo family, which owns RGS, features in a 2010 Wikileaks dump of US embassy cables (specifically this one from 2004<\/a>) which purported to link the Gulamo family to the drug trade.<\/p>\n\n\n\n

RGS executive chair Aquil Rajahussen has convincingly argued that the US diplomat got it wrong, confusing the Gulamo family with alleged drug dealer Gulamo Rasul Moti.<\/p>\n\n\n\n

Rajahussen told amaBhungane, \u201cThe individual in question is not Rasul Gulamo. His FIRST name is Gulamo, and to the best of my knowledge, his surname, is Rassul\u2026  I want to clarify that I have no relationship with this individual\u2026 The first I learned about him was through WikiLeaks.  I have never met him\u2026 Given the prominence of our family, the media would not have failed to mention an association if one existed.\u201d<\/p>\n\n\n\n

\u201cWe have no involvement in contraband or anything deemed unlawful under the laws of Mozambique or Islam; Further, there have never been any credible allegations to the contrary.\u201d<\/p>\n\n\n\n

That is perhaps not quite 100% accurate.<\/p>\n\n\n\n

In 2017, the Gulamo family \u2013 and in particular Aquil Rajahussen \u2013 were implicated in an alleged money laundering scheme on behalf of former Minister of Mines and Geology for the Republic of Guinea, Mahmoud Thiam.<\/p>\n\n\n\n

Thiam was sentenced in the US to seven years in prison for laundering bribes paid to him by executives of China Sonangol International Ltd. and China International Fund, SA.<\/p>\n\n\n\n

Thiam used some of the Chinese bribe money to buy a $3.75 million estate in Duchess County, New York. <\/p>\n\n\n\n

A Gulamo group company, Sociedade Saboiera De Nacala Lda, was allegedly used to launder the cash. The agent of Sociedade was Aquil Rajahussen, described as Thiam’s friend.<\/p>\n\n\n\n

Two tribunals, the US court and the London court of international arbitration appeared to find that Rajahussen knew that Thiam was using Sociedade Saboiera De Nacala to conceal the transfer of funds. <\/p>\n\n\n\n

Rajahussen denies this.<\/p>\n\n\n\n

He explained, \u201cMahmoud Thiam was indeed a long-time acquaintance from our youth, and we maintained a friendly relationship over the years. However, it is crucial to clarify that I was neither involved nor implicated in any of his schemes or engaged in any business dealings with China Sonangol International, China International Fund, SA, VALE S.A., or BSG RESOURCES LIMITED, as mentioned in your inquiry. I became aware of his illegal activities only at the time of his prosecution.\u201d<\/p>\n\n\n\n

Rajahussen said that Thiam had sought a loan to buy the property but that he had instead decided to personally purchase the property, allowing Thiam to lease it on the understanding that he had an option to buy when he had the necessary funds.<\/p>\n\n\n\n

\u201cDuring the subsequent legal proceedings against Thiam, our arrangement came under scrutiny. While I was not directly involved in the proceedings and unaware of the findings, the authorities attempted to attach the property, claiming it belonged to Thiam. I contested this order, asserting that the property was rightfully mine and presented all such evidence necessary to prove as such to the courts. I succeeded in winning the case in the State of New York.\u201d<\/p>\n\n\n\n

Rajahussen does not deny his closeness to the ruling Frelimo party in Mozambique.<\/p>\n\n\n\n

\u201cI, like Patrice Motsepe [and the ANC], am openly a member of the Frelimo Party. I believe that being a member of a political party is a legal and permissible act in both SA and Mozambique. <\/p>\n\n\n\n

Similar to Patrice Motsepe, I engage in lawful contributions to political campaigns. \u201cImportantly, my company has no need for reliance on political favours. We do not conduct business with the government, nor do we participate in government tenders. We make absolutely no revenue from government revenues.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Things have been sour for sugar giant Tongaat Hulett since 2019, when a new management team uncovered accounting failures and alleged fraud that led to a R12-billion reversal in the company\u2019s valuation. The criminal trial of key former directors is…<\/p>\n","protected":false},"author":16,"featured_media":28459,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-28458","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/28458","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=28458"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/28458\/revisions"}],"predecessor-version":[{"id":29789,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/28458\/revisions\/29789"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/28459"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=28458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=28458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=28458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}