The much-anticipated creditors’ vote for sugar giant Tongaat Hulett has once again been delayed, sparking controversy and accusations of favoritism. The rescheduling, as claimed by bidder RGS Sugar in court, is allegedly to provide ANC funder Robert Gumede’s Vision group with additional time to secure funds for the deal.

Originally scheduled for Thursday, December 14, the critical section 151 vote on rescue plans by Vision and RGS has now been pushed to January 11 next year, according to an order from the Durban high court issued on Wednesday. Tongaat Hulett entered voluntary business rescue in November of the previous year, with the creditors’ vote facing multiple postponements amid negotiations involving a consortium of banks owed R8 billion, Vision, and the Public Investment Corporation.

The business rescue has received financial support from the Industrial Development Corporation (IDC), which stipulates the need for security from the successful bidder before further funding is released. However, complications have arisen as the South African Sugar Association (Sasa) and RCL Foods took legal action, seeking an interdict to declare the business rescue plans unlawful due to the omission of R1.5 billion owed by Tongaat Hulett in unpaid industry levies.

The unpaid levies, integral to the Sugar Industry Agreement, serve to subsidize smaller growers and other industry participants, ensuring an equitable distribution of profits. Despite attempts by business rescue practitioners Metis to avoid payment, the court ruled that the debt to Sasa and the industry must be honored.

RGS approached the court to compel Metis to conduct the creditors’ vote, while both Vision and Metis sought a delay until January. The court, presided over by Judge Rashid Vahed, ruled in favor of postponing the creditors’ vote until January 11, allowing Vision and RGS to present amended rescue plans during the meeting.

Notably, Vahed also ordered that the initially published business rescue plans by the two bidders would not be subjected to voting, providing an opportunity for revised plans to be presented. The interdict applications by Sasa, RCL, and RGS were postponed indefinitely, with the possibility of reinstatement in the future.

RGS, in court documents, argued for the immediate continuation of the creditors’ meeting, expressing readiness for the vote on its amended rescue plan. The head of strategic development at RGS, Shashikant Mangali, criticized Metis’ support for further postponement, deeming it “bizarre” given RGS’s fully funded and adoptable plan.

Mangali asserted that Vision’s plan lacked validity due to its failure to secure funding on two previous occasions. He accused business rescue practitioners of unfairly promoting the Vision plan, alleging that they were catering to the banks’ desire to minimize exposure to Tongaat Hulett and avoid risks in the business rescue process.

With the situation remaining fluid, the Tongaat Hulett creditors’ vote is now scheduled for January 11, with stakeholders closely watching for further developments in this high-stakes financial saga.