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The masterminds behind the Aurora Empowerment Systems debacle and other spectacularly botched liquidations were also behind a bizarre “fake” offer to buy the Gupta-linked VR Laser out of business rescue for R250m.
The bid from a company called Arctittrix collapsed under interrogation this week at a creditors’ meeting of VR Laser, one of the eight Gupta companies put under business rescue this year.
Immediately afterwards, Gupta lieutenant Ravindra Nath stood up and announced that Salim Essa was making a R70m offer instead.
Business rescue practitioner Louis Klopper told City Press that an “absurd” offer of R250m for VR Laser sounded like a scam to him.
He claimed this “suspicious bid” was the only one supported by the owners of VR Laser, namely Essa and the Guptas.
They have scuppered several other bids by refusing to negotiate a sale of the premises VR Laser uses, which they own through a separate company.
Klopper said they were, however, open to selling it to Arctittrix.
City Press can reveal that this bid, the largest received for VR Laser, was put together by a company chaired by Thulani Ngubane, one of the erstwhile directors of Aurora, alongside Khulubuse Zuma and Zondwa Mandela.
Their offer to take over the company was backed by an apparently fraudulent bank guarantee from PLG Capital Bank – an entity with no website and widely listed on scam warnings.
Klopper believes this guarantee is fake.
When they were unable to provide better assurances, Arctittrix revoked its offer and replaced it with an offer from its parent company Blain Capital Solutions to manage VR Laser and provide a R30m cash injection.
This was rejected as well – by VR Laser’s highest-ranking creditor, the Bank of Baroda.
The business rescue of VR Laser has dragged on since February, with several offers for the company scuppered by the Guptas’ refusal to sell the physical premises VR Laser uses in Boksburg.
These are owned by a separate company called VRLS Properties, also part of the Essa-Gupta network of companies.
Instead, anyone who buys VR Laser would be forced to become a tenant of a company in the Gupta group.
At least two bids to take over VR Laser have been scuppered because VRLS Properties refuses to sell the property.
Klopper said the “scam” offer from Arctittrix was the only one supported by VRLS Properties.
VRLS Properties’ director, JP Arora, admitted in the creditors’ meeting that he was talking to Arctittrix about selling the VR Laser premises – after refusing to negotiate with any other bidder.
Successive “strictly confidential” business rescue reports detail the different offers made for VR Laser.
A company called Olal had offered R90m for VR Laser, but only if they could get the property as well.
Similarly, a group called Rextec offered R47m with the acquisition of the property as a precondition.
Rextec representative Piet Bouwer told City Press that VRLS Properties refused flat out to even begin negotiating the sale of the property.
A scam
The Arctittrix offer is eerily reminiscent of Aurora, with suspicious bank guarantees and promises of mysterious foreign backers.
Aurora devolved into one of South Africa’s largest corporate scandals and saddled Zuma and Mandela, as well as the Bhana family, with debt of R1.4bn – the damage they caused to the Pamodzi mines.
Ngubane was not pursued because the liquidators of Aurora believed he had no assets.
Attempts to contact Ngubane by phone and email were unsuccessful.
On June 8, Arctittrix withdrew its offer and its holding company Blain Capital Solutions immediately made a new offer to take over VR Laser on a management contract. This was allegedly backed by a new guarantee from “Well Fargo Bank”, according to a letter by Ngubane addressed to the rescue practitioners of VR Laser.
In the letter, Ngubane identifies himself as the chairperson of Blain.
Ngubane’s letter claims that Blain has “Strategic joint-Venture Co-operation agreements with Steel plants in Jeddah Saudi Arabia, as well as in Jebel Ali UAE [United Arab Emirates]” and a board comprising “Saudi nationals as well as a strong South African participation with a collective 60 years experience in the steel fabrication industry”.
However, according to company records, Blain has only one director: Bonginkosi Mthethwa.
Mthethwa and Ngubane were partners in another botched acquisition of a distressed mine through their company Goldrich in 2014.
Enter Essa
Klopper said the R250m bid for VR Laser was nonsensical.
The company was not remotely worth what was being offered.
The new offer for R70m from Essa was also suspiciously high, said Klopper.
VR Laser was simply not worth R70m and was a candidate for liquidation, he said.
Other stakeholders told City Press the offer was probably just a delaying tactic of some sort.
If the R70m offer does not materialise, the rescue practitioners will let creditors vote to either liquidate or let the rescue practitioners do a controlled wind-down by selling assets.
VR Laser has three shareholders, all Gupta-linked companies: Elgasolve (controlled by Essa and Zuma) owns 65%, Craysure Investments (controlled by Gupta-owned Westdawn) owns 25% and Aerohaven Trading (Gupta executive Ronica Ragavan) owns 10%.
VR Laser’s largest creditors are the two major shareholders.
VR Laser owes Westdawn R83.5m and Elgasolve R209m.
These claims are, however, not secured like the Bank of Baroda or preferred like the SA Revenue Service and workers.
The rescue practitioners said the Gupta companies would get very little of this money back under any reasonable scenario.
Its major customer is Denel, which has “categorically said it won’t pay” more than R40m in outstanding bills or continue its old contract with VR Laser, said Klopper.
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