Robert Gumede has defended the involvement of the Vision Group with Tongaat Hulett.
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Billionaire entrepreneur and Vision Sugar shareholder Robert Gumede has come out guns blazing against critics accusing his consortium of “corporate hijacking”, regarding Vision’s involvement with the embattled sugar giant Tongaat Hulett.
In a high-stakes defence of Vision’s involvement, Gumede described their acquisition of Tongaat Hulett’s multi-billion rand debt as a “masterly deal” designed to rescue a 134-year-old institution currently languishing in a corporate “ICU”.
Speaking in an interview on SAFM, Gumede sought to “put facts against fiction” regarding the unfolding business rescue saga that has gripped the South African sugar industry.
The controversy follows reports that Vision triggered the immediate repayment of R11.73 billion in bank debt earlier this month, a move some analysts have described as a “debt bomb” intended to force the company into liquidation. The provisional liquidation application, brought by Tongaat Hulett’s business rescue practitioners, is in court tomorrow.
Gumede was quick to distance the current crisis from Black Economic Empowerment (BEE) initiatives, pointing the finger squarely at previous management. He noted that Tongaat Hulett, once a “doyen of South Africa,” came crashing down due to a multi-billion rand fraudulent scandal that is currently the subject of intense court proceedings. He emphasised that the previous BEE partners were never involved in the day-to-day management that led to the fraud.
“This business was run by a management team who were caught with serious fraudulent allegations under the nose and supervision of the board and shareholders then.”
Addressing allegations regarding “proof of funds,” Gumede dismissed the skepticism as “hogwash.” He clarified that Vision used its own capital to secure the debt, rather than relying on the IDC.
“We paid a deposit of R1.6 billion. We didn’t borrow the money from the IDC or any bank. It’s money that came from us as shareholders,” he asserted. He further confirmed that a second payment of R2 billion was made on May 9th last year. Gumede argued that by owning 43% of the security held by the banks and controlling the balance, Vision has effectively become the “bankers of Tongaat Hulett.”
As the threat of provisional liquidation looms over thousands of livelihoods in KwaZulu-Natal and Mpumalanga, Gumede denied that Vision is the architect of the company's possible demise.
He stressed that under South African insolvency law, the Business Rescue Practitioners, not the creditors, are in total control of the company. “We are not in a position to apply for any liquidation,” Gumede insisted.
“We are here to stay; we want to save the business. But business is about balance sheets. Do you have enough cash to service your debt? If you don’t, that’s what leads to insolvency.”
Gumede reiterated that Vision’s goal remains to convert a portion of their massive debt into equity to stabilise the company’s balance sheet. He called for an urgent, "workable and sustainable" solution involving the IDC, criticising the lack of direct engagement from the state-owned lender thus far.
“Can Tongaat Hulett be saved? Absolutely,” Gumede concluded. “But it requires everybody to sit around the table and find a lasting solution, not put a bandage on a cancer wound.”
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