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South Africa to reverse takeover of Tongaat Hulett by the Rudland family of Zimbabwe?
03 Jun 2022 at 09:36hrs | Views
The R2-billion takeover of sugar giant Tongaat Hulett by the Rudland family of Zimbabwe has potentially crashed and burned.
A key shareholder resolution paving the way for the deal was declared a "nullity" on Thursday by the Takeover Regulation Panel (TRP), a unit of the Department of Trade, Industry and Competition.
This followed an investigation into suspicious share purchases by a business partner of tobacco baron Simon Rudland right before a shareholder vote on the deal.
The TRP investigation set out to determine whether this associate, Ebrahim Adamjee and his family are "inter-related parties" with Magister Investments, the Mauritius-based company making the bid for Tongaat. The conclusion reached by investigator Zano Nduli is an unequivocal "yes" which means the share purchases must be presumed to represent Magister and the Adamjees acting in concert to sway the vote.
The reasoning is that Adamjee is Simon Rudland's partner in the Gold Leaf Tobacco Corporation. Simon is in turn the brother of Hamish Rudland who is the face of Magister.
Confronted with this assumed relationship Adamjee only provided a "bald denial" that he had a genuinely significant business relationship with Rudland. The tobacco tycoon is supposedly only "a non-resident non-executive director and is not involved in the business operations", according to a sworn statement by Adamjee.
Read the full investigation report here.
The voided resolution was a waiver of the normal requirement that anyone buying more than 35% of a public company must offer to buy out all other shareholders. It was cited as a major precondition for the deal when the transaction was set out in a circular to Tongaat shareholders in December. It was approved at a shareholder meeting in January with the support of major institutional shareholders such as the Public Investment Corporation (PIC) and Stellenbosch-based PSG Asset Management.
The TRP had initially assented to this waiver before an appeal by minority shareholders led to the investigation.
A key shareholder resolution paving the way for the deal was declared a "nullity" on Thursday by the Takeover Regulation Panel (TRP), a unit of the Department of Trade, Industry and Competition.
This followed an investigation into suspicious share purchases by a business partner of tobacco baron Simon Rudland right before a shareholder vote on the deal.
The TRP investigation set out to determine whether this associate, Ebrahim Adamjee and his family are "inter-related parties" with Magister Investments, the Mauritius-based company making the bid for Tongaat. The conclusion reached by investigator Zano Nduli is an unequivocal "yes" which means the share purchases must be presumed to represent Magister and the Adamjees acting in concert to sway the vote.
The reasoning is that Adamjee is Simon Rudland's partner in the Gold Leaf Tobacco Corporation. Simon is in turn the brother of Hamish Rudland who is the face of Magister.
Confronted with this assumed relationship Adamjee only provided a "bald denial" that he had a genuinely significant business relationship with Rudland. The tobacco tycoon is supposedly only "a non-resident non-executive director and is not involved in the business operations", according to a sworn statement by Adamjee.
Read the full investigation report here.
The voided resolution was a waiver of the normal requirement that anyone buying more than 35% of a public company must offer to buy out all other shareholders. It was cited as a major precondition for the deal when the transaction was set out in a circular to Tongaat shareholders in December. It was approved at a shareholder meeting in January with the support of major institutional shareholders such as the Public Investment Corporation (PIC) and Stellenbosch-based PSG Asset Management.
The TRP had initially assented to this waiver before an appeal by minority shareholders led to the investigation.
Source - news24
