Canegrowers to Urgently Intervene in Sugar Giant Tongaat’s Liquidation

The Tongaat head office was stripped of expensive paintings and antiques ahead of a possible visit by liquidators.

• The South African Canegrowers Association representing about 23,000 farmers supplying Tongaat Hullet is seeking to intervene in an urgent application to place the company in provisional liquidation.
• About 250,000 people’s livelihoods are at stake.
• This follows a breakdown of a business rescue plan involving the Vision Group.
• Abrina, which owns sugar farms contracted to Tongaat, has called for an investigation into the failure of the plan and has proposed growers explore taking over milling and refinery operations.

The South African Canegrowers Association, which represents about 23,000 farmers supplying Tongaat Hullet, are seeking to intervene in an urgent application by the company’s business rescue practitioners (BRPs) to place the sugar giant into provisional liquidation.

The urgent application follows the breakdown of a business rescue plan involving the Vision Group. This comes amid allegations that Vision had deliberately collapsed the deal by making outrageous demands.

Some growers have already filed papers seeking to intervene in the liquidation proceedings and are calling for a full investigation into what transpired.

The BRPs application was heard virtually in the Durban High Court by Judge Sanele Hltshwayo on Friday.

Given the opposition from several parties — including trade, industry and competition minister Parks Tau and the Industrial Development Corporation (IDC), which provided post-commencement finance to Tongaat — and the number of parties intending to intervene, the judge adjourned the matter. He set tight deadlines for further affidavits.

Judge Hltshwayo said the Judge President was aware of the urgency and was expected to allocate hearing dates in mid-March.

Advocate Ruan van Rooyen, appearing for the canegrowers’ association, placed on record that it would formally apply to intervene. The association has previously warned that liquidation poses a “profound risk” that threatens the livelihoods of thousands of small- and large-scale growers.

In a separate application to intervene, Abrina, which owns two sugar farms contracted to Tongaat, has proposed that all contracted growers “caucus” to explore taking over the company’s milling and refinery operations on an interim basis to prevent collapse.

Abrina has also called for an investigation into the bona fides of the winding up application, which it says “appears to be contrived”.

Its owner, Kadarnath Maharaj, states in his affidavit that it was “almost inconceivable to the public at large that an entity like Tongaat be wound up to the detriment of the livelihoods and income relied upon by about 250,000 people”.

He said the BRP’s conduct should be investigated, given that Tongaat had received more than R2.5-billion in post-commencement funding and that the practitioners could have sought an extension of the business rescue process from the court.

“This point, amongst others, screams out that the winding up application is contrived and designed to exert undue pressure or bully the IDC into submission to lend Vision (further) money,” Maharaj said.

During the business rescue, Vision acquired the lender group’s R11.7-billion debt, becoming the controlling creditor. Maharaj contends that Vision had thereby “imposed its own business rescue plan” on the creditors.

According to the BRPs, Vision called in this loan after negotiations with the IDC for an additional R600-million to prop up the company failed, with the IDC insisting that Vision contribute at least half the amount itself.

Maharaj also said that when the rescue plan was approved in January 2024, largely through the “might” of Visions’ voting rights, Vision did not lawfully “stand in the shoes of the banks” because the transfer of the banks’ claims was only finalised in May 2025.

“It is respectfully submitted that if and when this court is fully apprised of the situation, it will become apparent that Tongaat was rendered completely vulnerable for corporate vultures to simply benefit from the century-old company,” he said.

Creditor RGS Group Holdings, which has repeatedly challenged the Vision plan in court, mostly unsuccessfully, is also opposing the liquidation. It has filed a counter application seeking dismissal of the liquidation application and an order setting aside the Vision plan. If successful, the business rescue process would continue and RGS would propose a new rescue plan.

RGS chair Momade Aquil Rajahussen said in his affidavit that Vision’s plan was “doomed to fail” because it lacked the necessary funding and because “material facts” had been withheld from affected parties.

“Vision has, to date, not injected any capital into Tongaat, which has stayed afloat thanks solely to the IDC,” he said.

He said Vision had funded the purchase of the lender group’s claims with borrowed money, not its own capital, and later sought to enforce that claim, conduct he called “predatory behaviour”.

Vision has not yet filed papers. But in a press statement, it pledged to “salvage the business”. In meetings with unions, it said it was in discussions with the IDC.

Vision has said it invested billions of rand to acquire the lender group’s claims, supported management in improving performance at plants, sought new clients, assisted with recruiting of key leadership — sometimes at its own cost — and engaged government, including the Department of Trade, Industry and Competition, on industry reforms aimed at saving jobs and stabilising the sugar sector.

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