IDC to fight Gupta rescuers | Fin24
  • Covid-19 Money Hub

    The hub will help answer your business and money questions during the coronavirus crisis.

  • Cigarettes

    The tobacco ban is a 'deal with the devil' that undermines transformation, say lobby groups.

  • Easing the Lockdown

    Liquor makers want bars to become drink-collection points when the alcohol ban lifts.


IDC to fight Gupta rescuers

Apr 08 2018 06:00
Dewald Van Rensburg

The Industrial Development Corporation (IDC) is on a collision course with the business rescue practitioners appointed to run eight of the Gupta family’s companies.

The state financier will ask the Pretoria High Court this week to remove Louis Klopper and Kurt Knoop as rescue practitioners of Shiva Uranium.

“It is the IDC’s view that the business rescue practitioners are neither objective nor independent. They have failed to effectively take over the mine so that it can have a fair chance at being rescued. This is the crux of the matter that is before the courts,” IDC spokesperson Zimbili Mosheshe told City Press.

Klopper said the IDC is blocking a deal with local mining company BEK Holdings that would result in it managing Shiva for an interim period until the company can be sold.

BEK is also a bidder to buy the company.

Klopper told City Press that the IDC’s objections are similar to those raised in a prior, unsuccessful, attempt to remove him and Knoop when it was alleged they were somehow connected to the Gupta family.

“There are accusations of incompetence too,” he said, adding that the IDC was trying to undo the damage of a catastrophically bad business decision it made in 2014 when it traded R256m in debt for essentially worthless shares in Oakbay Resources and Energy.

City Press revealed last year how the IDC was forced to do this by a handwritten amendment to a deal with the Gupta mining company. This deal is now subject to a court case in which the IDC is claiming its R256m back in addition to another outstanding sum of R35m from Oakbay.

This huge disputed sum is the IDC’s claim against Shiva, which the rescue practitioners have offered to ringfence for the IDC if they sell the asset.

Klopper and Knoop intend to sell Shiva before too long after receiving two offers.

Klopper said the IDC’s concerns did not seem sincere because he and Knoop had already offered to let two additional independent practitioners work on Shiva to placate the IDC.

This was done at Optimum and Koornfontein, the two largest Gupta assets under administration, to appease the National Union of Mineworkers, said Klopper.

But the IDC insists on its own nominated practitioners, he told City Press.

The IDC’s application to replace the two at Shiva follows an earlier attempt to remove them from Optimum Coal.

In that case a newly registered company called Deriko Mining and Exploration had bought up an Optimum creditor’s debt to launch an application.

Deriko failed to get an urgent court hearing and that case is set to be heard in September.

‘Suspicious address’

One offer for Shiva, for $50m, comes mysteriously from Dubai-headquartered Netoil Enterprises.

All the rescue practitioners received was a one-page letter saying Netoil offers $50m.

“We don’t know anything else about them,” said Klopper.

City Press’ attempts to contact the company failed.

Klopper did note that because the company is Dubai-based it would probably raise eyebrows because the Gupta brothers have their second base there.

Klopper called it a “hostile bid from a suspicious address”.

He clearly favours a rival bid for less money from BEK which will be presented to creditors.

BEK is the BEE partner in China-Africa Precious Metals (CAPM), a company that bought the Orkney gold mine out of liquidation in 2011, but failed to restart it.

In a letter to the rescue practitioners BEK chair Elias Khumalo said Orkney shafts are finally reopening this year and that CAPM wants to acquire Shiva to use its processing plant.

It is offering $35m.

Both offers are for Shiva’s main asset, the Shiva Uranium Mine – as well as the Brakfontein coal mine it also owns. The coal mine is actually the valuable part since uranium prices are too low to profitably mine the nuclear fuel at Shiva.


South Africa’s commercial banks have still not reopened accounts for the Gupta companies under business rescue.

The two big coal mines, Optimum and Koornfontein, are however now using a third party to operate, the business rescue practitioners told creditors in letters this week.

A “reputable entity in the mining industry” is helping run the mines and providing banking facilities, the letters said.

BEK is meant to do the same for Shiva, but this agreement is being held up by the IDC, said Klopper.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

Voting Booth

How has Covid-19 impacted your financial position?

Previous results · Suggest a vote