Tongaat Hullet, which traces its roots to the 1850s will remain a proudly South African company after a consortium led by business mogul Robert Gumede this week fended off competition and he is looking at getting the company’s shares trading again on the JSE.
Gumede and his partners Rute Moyo, Amre Youness and Nauman Khan this week pulled a mean feat, outbidding rival bidders to land the great South African asset.
Vision, which is owned by the Mpumalanga-born billionaire, outbid Karega Sugar, a Tanzanian company, which belongs to multi-millionaire siblings, Seif Ali Seif and Nassor Seif.
Gumede, who is a global entrepreneur and philanthropist also through Vision consortium, also edged out a leading Mozambican conglomerate, RGS Group Holdings, owned by the politically connected Gulamo family with interests in tea, sugar, farming and consumer goods.
Vision, which has other investors from Pakistan and Zimbabwe, will be at the helm of the Tongaat after buying the sugar entity’s R8-billion debt.
Vision spokesperson Rob Bessinger said the consortium conducted a deep dive due-diligence in all countries – South Africa, Zimbabwe, Botswana and Mozambique – where Tongaat is the leading sugar company and one of the largest employers.
“Having been involved in this transaction since late 2020, we always believed that in the right hands, THL can return to being a great business. We have a team that has a sustainable plan to turn around, grow and diversify the group back into relevance.
“We are confident of how we have minimised transaction execution risks and are confident we shall achieve all our goals sooner rather than later. There is no time to celebrate as all hands are now on deck to steer the company out of insolvency and business rescue so that we can have the business operating profitably and share trading suspension on the JSE lifted.”
In one of SA’s biggest scandals since Steinhoff disclosed accounting fraud in December 2017, Tongaat in June 2019 asked the JSE to suspend trade in its shares after an investigation flagged accounting practices that meant its financial statements could not be relied on.
The sugar producer went into voluntary business rescue in October 2022 to prevent bankruptcy. This is after it could not recover from a R12-billion hole in its books, following acts of fraud by some of its former executives.
The fraud was uncovered in 2018.
The Industrial Development Corporation (IDC) in 2022 came to Tongaat’s rescue, providing it with the much-needed funding to keep the business functioning, paying farmers and salaries.
Tongaat has since launched a civil claim in an attempt to recoup millions of rands from its former CEO Peter Staude, CFO David Munro and former finance executive Sean Slabbert, demanding R450-million from them based on a damning PwC forensic investigation released a year earlier. The men were in 2022 charged with fraud amounting to R3.5-billion.
The JSE last year found that Munro cannot escape taking responsibility for the accounting fraud that took place under his watch, which brought the company to its knees. The JSE then proceeded to slap Munro with a R6-million fine and banned him from being a director of a listed company for 10 years.
Newly appointed Eskom Dan Marokane was the man appointed to steady the ship through the business rescue process.
Vision extended thanks to him and his leadership in keeping the company afloat during the darkest period in its long history.
“We would like to appreciate the sterling leadership of acting CEO Dan Marokane, CFO Rob Aitken and their management teams and staff across all jurisdictions in keeping the business on course and ensuring firm stability for over a year of the business rescue process.”
