The Durban High Court has numerous complex documents to work through before it sits on 16 and 17 April to hear whether the sugar milling giant Tongaat Hulett should be placed in provisional liquidation. From the Minister of Trade, Industry and Competition to a grassroots sugarcane grower recently lodged their written opposition to the liquidation with the court.
By Lloyd Phillips, senior journalist at African Farming and Landbouweekblad
The liquidation of Tongaat Hulett would have crushing socio-economic consequences, including a “jobs bloodbath” across a massive swathe of South Africa, according to Parks Tau, Minister of Trade, Industry and Competition.
Yet, this 134-year-old sugarcane growing and sugar milling, refining and value-adding giant having the bulk of its operations in KwaZulu-Natal, is reportedly sitting with combined current and projected debt of around R18.5 billion.
This reportedly comprises R11.7 billion being claimed by the Vision Group that since January 2024 tried but ultimately failed to acquire Tongaat Hulett, R2.3 billion owed to the Industrial Development Corporation (IDC) for a post-commencement funding loan since October 2022 to keep Tongaat Hulett operational until the acquisition was concluded, approximately R4 billion for payments to about 15 000 sugarcane growers, about R517 million owed to the South African Sugar Association in outstanding industry levies and redistribution payments, and R75 million to unsecured creditors.
In documents presented to the court, Trevor Murgatroyd, Gerhard Albertyn and Petrus van den Steen, business rescue practitioners for Tongaat Hulett, state there are no financial resources remaining to keep the company operational.
“Tongaat Hulett faces a milling season commencing in April/May 2026 that will require substantial working capital. The IDC’s assertion that Tongaat Hulett can operate until June 2026 conveniently addresses only the off-crop period; not the capital‑intensive milling season. There is no funding certainty for the costly milling season and consequently Tongaat Hulett must be placed in liquidation.
“[As per Section 141(2) of the Companies Act (No. 71 of 2008)], the [business rescue] practitioner has no discretion to refrain from bringing the application [for liquidation], regardless of stakeholder objections, the desirability of alternative outcomes, or the socio-economic consequences of liquidation.”
Also read: Rejected suitor still determined to secure Tongaat Hulett’s hand
Alleged Impropriety and Potential ‘Jobs Bloodbath’
Meanwhile, Tau, the IDC, the South African Canegrowers Association (SA Canegrowers) representing the interests of the country’s sugarcane growers, and Hariyali Farms, a contracted sugarcane supplier to Tongaat Hulett, have all submitted affidavits to the court to oppose the application for liquidation.
Tau states in his affidavit: “The continued business rescue proceedings of Tongaat Hulett will prevent a jobs bloodbath often associated with liquidation, stabilise the sugar industry, and support small businesses at risk of losing their main markets.
“The Companies Act was designed to preserve viable enterprises and jobs; not to facilitate premature liquidation at the behest of creditors or frustrated stakeholders.”
SA Canegrowers states in its affidavit: “Liquidation would likely close Tongaat Hulett’s mills just before the season, leaving about 4.4 million tons of sugarcane unprocessed and denying growers approximately R3.8 billion in seasonal receipts.
“The [sugarcane value chain] generates in excess of R18 billion annually in direct income and creates somewhere between 65 000 and 85 000 direct jobs, and 350 000 indirect jobs, predominantly in rural areas. Sustaining the [sugarcane value chain] and its production levels, is a matter of national social and economic importance.”
Hariyali Farms alleges in its affidavit that Tongaat Hulett retained 5% to 10% of the proceeds the company owes to the farming business for its sugarcane deliveries to Tongaat Hulett during the 2025-’26 milling season. Tongaat Hulett also allegedly owes Hariyali Farms for the latter’s planting and crop establishment costs under sugarcane supply and milling agreements with Tongaat Hulett.
“The business rescue practitioners failed to disclose or utilise other Tongaat Hulett assets like Voermol Feeds and Tongaat Hulett Developments, or to explore rescue and/or rehabilitation options, thereby prejudicing growers’ interests.
“The winding‑up application risks severe public interest harm through the loss of milling and refining capacity, to the livelihoods of growers and approximately 250 000 people, and would irreparably prejudice Hariyali Farms and other growers through the loss or reduction of dividends and payments.”
Also read: ‘Tongaat Hulett liquidation must be last resort’ – government
Alleged Fraudsters Still To Be Tried
RGS Group Holdings (RGS), the Mozambican investment conglomerate, was initially a rival bidder for Tongaat Hulett until withdrawing its proposed business rescue plan in January 2024, citing alleged bias towards the Vision Group’s plan. Even though the 7 February 2026 deadline for the Vision Group’s plan to be fully implemented has passed and, therefore, the plan has technically lapsed, RGS wants the Durban High Court to declare the plan unlawful, have it set aside, compel the Vision Group and the business rescue practitioners to disclose allegedly controversial parts of the plan, and allow RGS to again bid for Tongaat Hulett.
The avalanche towards Tongaat Hulett’s present existential predicament began in the 2010s when six company executives and one external auditor allegedly colluded in large-scale fraud aimed at masking Tongaat Hulett’s declining financial performance. Alleged actions by the co-conspirators reportedly included artificially inflating financials, misrepresenting income and claiming substantial bonuses for what was otherwise falsely strong company performance.
The alleged direct fraud impacts totalling R4.57 billion reportedly specifically identified by investigators is said to have impacted a total of R12 billion of Tongaat Hulett’s equity.
Criminal cases against the former executives, namely Peter Staude, chief executive officer, Murray Munro, chief financial officer, Kamasagrie Singh, legal executive, and Samantha Shukla, finance executive, of Tongaat Hulett; Michael Deighton, managing director, and Rory Wilkinson, director, of Tongaat Hulett Developments; and, Gavin Kruger, a partner in auditing firm, Deloitte & Touche South Africa, remain ongoing. They have all been on bail of R30 000 each since February 2022. The main trial is scheduled to start in September.
To access all documents pertaining to Tongaat Hulett’s proposed liquidation, click here.
Also read: WATCH | Sugar industry in crisis – KZN’s premier pushing to save Tongaat Hulett
