Former Transnet board member and Gupta associate Iqbal Sharma during his appearance for a bail application at the Bloemfontein Magistrate’s Court on 7 June 2021.
PHOTO: Mlungusi Louw/Gallo Images, Volksblad
- The NPA is questioning whether the business rescue practitioners or the director has the authority to represent a Gupta company facing a restraint order.
- The company, Islandsite Investments, which went into business rescue, has a provisional restraint order against it.
- The court ordered that property attached to the company be disclosed and surrendered.
The interim restraint order against one of the Gupta family’s company and business associate, Iqbal Sharma, has taken a new turn as the Free State High Court in Bloemfontein has to decide whether the business rescue practitioners or a director has the authority to represent the company.
The National Prosecuting Authority (NPA) has questioned the authority of Ronica Ragavan to represent the third defendant, Islandsite Investments, in opposing the confirmation of the provisional restraint order.
In June this year, the high court granted the provisional restraint against dealing with realisable property of Sharma, Nulane Investments, Islandsite Investments, Issar Global Limited, Issar Capital, Tarina Patel-Sharma and the business rescue practitioners connected to the companies.
The court further ordered that such property be disclosed and surrendered.
The order was made is in terms of the Prevention of Organised Crimes Act (POCA).
The court also appointed a curator to take control and preserve the assets, pending the outcome of the criminal case of fraud and money laundering against Sharma and members of the Gupta family, in relation to the failed Estina dairy farm project.
While the interim order has been extended to 18 November, where the court will then decide whether to make the order final, the NPA has now raised questions about who has authority in court matters dealing with the companies.
This comes after Ragavan, a director of Islandsite Investments, who has worked for the Gupta family, hired her own legal team to oppose the restraint application.
In court papers, the NPA asked the court for leave to dispute the authority of BDK attorneys to represent Islandsite Investments.
In her affidavit, the head of the NPA’s Investigating Directorate, Hermione Cronje, said Islandsite Investments had been placed into business rescue and that the business rescue practitioners, Kurt Knoop and Johan Klopper, are the duly authorised representatives of the company.
She argued that, because the company went into voluntary business rescue, the practitioners have full management control of Islandsite Investments.
Cronje further pointed out that Ragavan failed to disclose any authority to represent the company in the proceedings. Furthermore, the business rescue practitioners had already appointed a legal team and affidavits were deposed in respect of the restraint application.
Cronje said the current situation prejudices the NPA as it would be put in a position of filing replying papers without knowing whether Ragavan is authorised to represent the company.
While the company remains in business rescue, the continuation of Knoop and Klopper has been subject to legal battles.
In 2018, the Guptas asked the Gauteng High Court in Pretoria to remove Knoop and Klopper.
In 2019, the court found in favour of the Guptas.
However, the matter was then appealed – and the Supreme Court of Appeal ordered that Knoop and Klopper remain in office.
The Guptas have since approached the Constitutional Court.
The NPA argued that the SCA judgments were not suspended, pending the apex court application.
In her affidavit, Ragavan contended that the business rescue practitioners cannot represent the company in terms of asset-forfeiture restraint applications.
She added that directors of a company continue in their capacity of directors and remain responsible for the affairs of the company and for the governance of the company insofar as the company needs to be run outside of the function and authority of the business rescue practitioners.
She further argued that the company is no longer in business rescue, pending the outcome of her leave to appeal application before the Constitutional Court.
Ragavan was of the view that the pending litigation suspends the orders by the SCA and, therefore, Knoop and Klopper have not been reinstated as business rescue practitioners for Islandsite Investments.
News24 previously reported that Islandsite owns 40% of Oakbay Investments, as well as the Gupta mansion in Saxonwold, and the family’s luxurious home in Constantia, Cape Town.
According to the company’s business rescue plan, its total market value stood at R513.8 million and its creditors totalled R776.9 million.
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