Analysis : Mozambican group RGS ups the stakes in court battle to counter Tongaat Hulett liquidation and rival Vision consortium

The stakes are enormous: thousands of direct jobs; tens of thousands of rural livelihoods; north-ern KwaZulu-Natal’s agricultural core, indeed, potentially the very stability of the province. But both the Tongaat Hulett Limited (THL) liquidation application – and RGS’s new affidavit opposing it – also raise urgent wider questions about the professional conduct of those who feed off corporate distress: the banks, the lawyers, the business rescue and liquidation industry – and of course the bidders who scramble to pick up the pieces. Perhaps that’s why it feels like the business rescue practitioners (BRPs) and their lawyers are doing their best to ensure these questions – and the specific conduct of the THL matter – do not undergo proper scrutiny. For example, there is the unseemly urgency of the application for provisional liquidation. The BRPs filed their application electronically at 10h50 on Thursday, 12 February 2026. A copy – excluding annexures – was published on THL’s business rescue website later that day, but a full copy of the application was only published on Friday, 13 February 2026. This was the same day the BRPs set as the deadline for interested parties to formally give notice of their intention to oppose the application. In other words, opposing parties in theory had only a few hours to read the documents, obtain lawyers and decide if they had the means and grounds to resist the liquidation. This is in a context where the BRP’s founding affidavit is 118 pages long, and the full application runs to 1356 pages. The BRPs also set a deadline of Tuesday, 17 February, for those opposing the liquidation to file their papers, at most two working days later. In his answering affidavit, RGS chair Momade Aquil Rajahussen described this as “abusive”. RGS was able to file its notice to oppose on Tuesday, 17 February, but the next day received an email from the BRPs’ attorneys informing RGS that its answering affidavit would be “out of time”. Rajahussen complained this was “unacceptable conduct from a litigant, which amounts to an abuse” – particularly in the context of urgent applications. The RGS chair said both the urgency and timing of the BRP application were unjustifiable “given the catastrophic implications of the relief sought by the BRPs as well as the facts leading up to the filing of this application”. If you read the full RGS affidavit, available here, it’s easy to see why the BRPs might want a quick exit, leaving the mess for someone else to clean up and avoiding having to account for their management of the business rescue. By contrast, RGS wants a reset based on maximum transparency. It remains to be seen whether anything like this will happen because there are enormous pressures for government to fund a compromise with Vision, resulting in a deal that will draw a curtain on allegations of impropriety. That’s why RGS wants its day in court. Its opposition to the provisional liquidation rests on four interrelated assertions: - THL remains capable of rescue, including without Vision; - Vision’s purported ownership of the original bank Lender Group Claims and Security are not a barrier to THL’s rescue, in part because the adoption and implementation of the Vision business plan – to which that ownership is inextricably linked – was unlawful and should be set aside; - Liquidation would be catastrophic, but the court can instead send the matter back to the BRPs to seek a new business rescue plan; - The court should order the key disclosures that RGS has been fighting for all along- including THL’s full management accounts; Vision’s agreements to acquire the R11.7-billion debt claims from the Lender Group – as well as the security instruments by which Vision claims it can take control of the whole Tongaat Hulett group. If the court obliges, RGS says it is in a position to propose a new rescue plan and, in the interim, to help with emergency funding (so-called Post Commencement Funding or PCF) that up to now has been carried by the state-owned Industrial Development Corporation (IDC). Let’s take a closer look. THL remains capable of rescue RGS argues that the BRPs applied for liquidation on the basis of the failure of the Vision Plan, not on the basis that THL was insolvent. Their affidavit says the BRPs should have gone back to court “a very long time ago”, but their reasons for now doing so are misdirected. They note, “The BRPs’ conclusion that THL no longer has a prospect of rescue is based primarily and materially on the abject failure of the Vision Plan [and] Vision’s attempt to enforce the LG [Lender Group] Claims and Security of R11.73 billion against THL on 8 February 2026. “The 118 pages of the founding affidavit contain one solitary allegation of commercial insolvency at paragraph 15.8. The rest of the founding affidavit describes the emergency that confronts THL due to the unlawfulness and failure of the Vision Plan. “More specifically, the bulk of the founding affidavit explains how the IDC PCF Facility – which was by definition meant to be temporary – can no longer support THL’s needs in circumstances where THL has not benefitted from any of Vision’s chief obligations under the Vision Plan, all of which remain unfulfilled, and which were meant to result in THL’s rescue.” But if the Vision plan has failed, it does not follow that business rescue has. RGS notes, “The BRPs do not attach the usual detailed financial information to the founding affidavit to demonstrate the allegation of commercial insolvency: no financial statements, management accounts, or formal cashflow projections have been provided … “THL still has both valuable assets and the ability to operate as a going concern provided it has access to the necessary working capital (currently understood to be in the region of R600 million)… The BRPs have, however, concluded that the failure of the Vision Plan equates to the failure of THL’s rescue proceedings without apparently considering any alternatives. Instead, as the founding affidavit shows, they chose to simply persist in attempts to pressurise the IDC for addi-tional funding on Vision’s behalf. “The founding affidavit contains no allegations to the effect that the BRPs took any steps to determine whether, given the failure of the Vision Plan, an alternative solution could be found with an investor who has access to the funds necessary to implement a sustainable rescue.” RGS maintains it is such an investor, and it submits a term sheet agreement with the African Export-Import Bank (Afrexim) in relation to a facility of US$ 280 million (i.e. circa R4.5 billion) specifically designated for purposes of a plan to be put forward to rescue THL from liquidation. It also suggests that, while Afrexim conducts due diligence, RGS would be willing to negotiate putting up a guarantee to enable the IDC to increase its emergency funding to accommodate the extra R600-million in working capital that THL requires. In his affidavit the RGS chair notes tartly, “When the IDC proposed a ‘security sharing’ solution (i.e. where Vision would lift some of the security it purportedly holds over THL’s assets by virtue of the LG Claims and Security to allow the IDC to make headroom in the PCF Facility), Vision re-fused, instead expressing the view that ‘Government ought to assist the IDC in relation to Ton-gaat’s funding needs’.” But what about the R11.73-billion in debt that Vision called in on 8 February? Vision’s purported ownership of the Lender Group Claims and Security are not a barrier to THL’s rescue This is an absolutely core challenge to the leverage Vision is trying to wield over the process, effectively saying, you have to work with us, or we’ll take the assets anyway. RGS gives three main reasons why Vision’s possession of the LG Claims and Security is not a barrier to the success of an alternative rescue plan. The first reason is bound up with RGS’s allegation that the way the Vision business rescue plan was approved, executed and paid for was unlawful and should be set aside. The RGS chair points out that Vision and the BRPs “represented to creditors at the Creditors Meeting on 10 and 11 January 2024 that Vision had sufficient funds in cash to implement the Vision Plan”. He states, “The Vision Plan was adopted pursuant to and on strength of these representations after serious concerns from creditors regarding Vision’s access to funding. “Vision failed to acquire the LG Claims and Security in the 16 months between the adoption of the Vision Plan and 9 May 2025 (a fact of which the BRPs were aware but did not disclose to Affect-ed Persons).” In other words, he alleges Vision induced creditors to vote to adopt the Vision Plan on the basis of a material misrepresentation. “Vision’s failure to complete the LG Claims Acquisition during the aforesaid 16 month period resulted in inter alia (i) the failure of the Equity Conversion and (ii) devastating financial consequences for THL since it was left in limbo without the benefit of any of the relief contemplated in the Vision Plan having come to pass. ”Vision acquired the LG Claims and Security for R3.24 billion on 9 May 2025; “Vision paid for the LG Claims and Security using money borrowed from Standard Bank, not its own cash funding; “Vision has not to date injected any capital into THL (which has stayed afloat thanks solely to the IDC); “Vision then sought to enforce the LG Claims and Security against THL in the amount of R11.73 billion, during the currency of Vision’s purported “rescue” of THL, on 8 February 2026.” Rajahussen labels this “predatory behaviour” that “must not be tolerated”. He explains to the court that the BRPs stubbornly adopted the position that the details of how and when Vision acquired the Lender Group Claims did not concern them and amounted to a private agreement, concluded outside the scope of THL’s rescue proceedings. “The BRPs’ position is both incorrect on a plain reading of the Vision Plan and negligent. As this court confirmed [previously], the LG Claims Acquisition is a condition to the Vision Plan. Before and until the acquisition was concluded, the BRPs and Vision could not lawfully proceed with either the Equity Conversion or the Asset Transaction.” The second reason why Vision’s current possession of the Lender Group Claims and Security is not a barrier to an alternative rescue plan is that, according to Rajahussen, the BRPs have not ever independently confirmed the “validity, extent, or efficacy of the security attaching to the LG Claims”. He states, “The mechanism by which the LG Claims are allegedly secured is referred to only in vague and mysterious terms in the Vision Plan, and is said to arise, to the extent that it has been disclosed and understood, on the basis that: - THL’s subsidiaries have been conducting business since the 1980s, unbeknownst to anyone, as agents for THL as their undisclosed principal (THL’s subsidiaries include, for example, Ton-gaat Hulett Sugar South Africa Ltd, itself a listed company); - by virtue of the aforesaid alleged agency relationship, all of the subsidiaries’ assets were allegedly in fact THL’s assets.” This, lawyers say, is an unusual construction to say the least, and forms the basis of RGS demand that the court orders disclosure of the underlying security instruments. The third reason why Vision’s possession of the LG Claims and Security – even if valid – is not a barrier to an alternative rescue plan arises from the legislation, RGS argues. Vision of course holds the major portion of the secured creditor claims, so, even if a better business rescue plan was presented by someone else, Vision could and would simply vote it down – so the argument goes. Rajahussen states, “I am advised, however, that the SCA has confirmed that a creditor’s vote against the adoption of a business rescue plan will be set aside in terms of sections 153(1)(a)(ii) and 153(7) of the Act where the result of such vote is deemed ‘inappropriate’. “Assessing the appropriateness of the vote entails a value judgment and tests the result of the vote against the objectives of business rescue, i.e. the balancing of the rights and interests of all affected persons. On this basis, a creditor, no matter the extent of its claims or security, cannot vote down the best available plan in the pursuit of naked self-interest at the expense of all Affected Persons.” What happens next? RGS is asking the court to dismiss the BRPs’ request for termination of business rescue and the provisional liquidation of THL. In this, it is likely to have plenty of support. The Department of Trade, Industry and Competition (DTIC), the IDC, the SA Cane-growers Association and others have all indicated they will join the opposition to provisional liquidation. Vision, of course, will not. In Rajahussen’s words, it is in a position where it can “assert the Lender Group Claims and Security of R11.73 billion and embark on a corporate raid to no one’s benefit but its own”. But RGS is also asking for an order setting the Vision Plan aside on the basis that it is unlawful and has failed (as well as the disclosure orders mentioned above) – and here both the BRPs and Vision have indicated they will oppose RGS. And here RGS’s biggest challenge will be time. In court, there will be irresistible pressure for a postponement while the parties try to cobble together a deal that will make all the RGS allegations moot. Meanwhile, Vision has embarked on a public charm offensive and held meetings with politicians, union leaders and, according to reporter Sihle Mavuso, promised King Misuzulu KaZwelithini that he will save the company by turning it into an electricity and ethanol producing giant. Elsewhere in the RGS affidavit, speaking of both the BRPs and Vision, Rajahussen asserts, “The nature and extent of the pressure placed on the IDC, coupled with the ridiculous suggestion that it was somehow responsible for this application for liquidation, is concerning. “It smacks of an attempt to draw the IDC and DTIC out, upon and in response to the issuing of this application, and to create a situation that would make it as difficult as possible for them politically not to accede to Vision’s increased funding demands, considering the economic and human catastrophe that is at stake.” He’s not wrong.