A1 Capital (Pty) Ltd v Urban Lifestyle Investment Holdings (Pty) Ltd and Others (2025-120753) [2026] ZAKZDHC 21 (20 March 2026)

IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL LOCAL DIVISION, DURBAN

CASE NUMBER: 2025-120753
In the matter between:

A1 CAPITAL (PTY) LTD APPLICANT
(Reg. No. 2007/019683/07)

and

URBAN LIFESTYLE INVESTMENT FIRST RESPONDENT
HOLDINGS (PTY) LTD
(Reg. No 2017/512579/07)
THE COMPANIES AND INTELLECTUAL SECOND RESPONDENT
PROPERTIES COMMISSION
AFFECTED PARTIES THIRD RESPONDENT


Coram: MOSSOP J
Heard: 28 and 29 January 2026
Delivered: 20 March 2026


ORDER


The following order is granted:

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1. The application to place the first respondent under supervision and to
commence business rescue proceedings is dismissed with costs . As regards the
payment of those costs:
(a) The costs of the affected parties, Nedbank Limited and the Unemployment
Insurance Fund, shall be paid by the applicant on the attorney and client scale and
shall include the costs of two counsel where so employed; and
(b) The affected party, RSA Boss Protection (Pty) Ltd, shall pay its own costs.
2. The counter-applications brought by the affected parties, Nedbank Limited and
the Unemployment Insurance Fund, are granted and a rule nisi issues, calling upon
the first respondent, and any other interested party, to show cause to this court on 24
April 2026 at 09h30, or so soon thereafter as counsel may be heard, why the first
respondent should not be finally wound-up.
3. This order shall operate as an order provisionally winding -up the first
respondent with immediate effect.
4. A copy of this order shall be published on or before 10 April 2026, once in the
Government Gazette and once in a newspaper published in Durban and circulating in
KwaZulu-Natal.
5. The costs of the liquidation application shall be costs in the winding -up and
the costs of Nedbank Limited and the Unemployment Insurance Fund shall be paid on
the attorney and client scale and shall include the costs of two counsel where so
employed.
6. Identical orders shall simultaneously issue, mutatis mutandis, in the following
matters:
(a) Case number 2025-120714: Homii Lifestyle (Pty) Ltd v K2017659127 (SA)
(Pty) Ltd.
(b) Case number 2025-120725: Homii Lifestyle (Pty) Ltd v K2017659651 (SA)
(Pty) Ltd;
(c) Case number 2025-120731: Homii Lifestyle (Pty) Ltd v K2018043790 (SA)
(Pty) Ltd;
(d) Case number 2025-120738: Homii Lifestyle (Pty) Ltd v Umbulumko
Knowledge Services (Pty) Ltd; and
(e) Case number 2025-120747: A1 Capital (Pty) Ltd v Uli Props (Pty) Ltd.

3


JUDGMENT



MOSSOP J:
Introduction
[1] Initially, what was intended to be argued before me were seven applications
in which the commencement of business rescue proceedings was sought against
seven companies. Each of the seven applications had its own case number and each
was brought in terms of the provisions of s 131(1) of the Companies Act 71 of 2008
(the Act). However, only six of the seven applications were actually capable of being
argued.

[2] All of the seven companies sought to be placed under supervision and in
business rescue are members of a group of companies that I will henceforth refer to
as ‘the A1 Group’.1

A snapshot of the A1 Group
[3] The applicant in this application, A1 Capital (Pty) Ltd, stands atop a hierarchy
of two groupings of private companies. In the first grouping:
(a) Immediately beneath it are two companies, Uli Props (Pty) Ltd, which I will
refer to as ‘UProps’, and Urban Lifestyle Investment Holdings (Pty) Ltd, which is the
first respondent in this application;
(b) Immediately beneath the first respondent is a company called Homii Lifestyle
(Pty) Ltd, which I shall refer to as ‘Homii’.
(c) Homii, for all intents and purposes, is the holding company of four other
companies, which are ranked directly below it in the A1 Group hierarchy, namely
K2017659651 (SA) (Pty) Ltd (K1), K2017659127 (SA) (Pty) Ltd (K7), K2018043790
(SA) (Pty) Ltd (K0) and Umbulumko Knowledge Services (Pty) Ltd (Umbulumko).


1 The A1 Group is a ‘group of companies’ as defined in s 1 of the Act , with the applicant being the
holding company of that group.

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[4] The second grouping of companies that fall under the applicant is headed by
Educor Holdings (Pty) Ltd , which is a wholly owned subsidiary of the applicant.
Beneath Educor Holdings (Pty) Ltd is its subsidiary, Educor Property Holdings (Pty)
Ltd (EPH). Falling under EPH are Lococo 3 (Pty) Ltd (Lococo 3) , Lococo 4 (Pty) Ltd
(Lococo 4), Old iStudy 4 (Pty) Ltd (Old iStudy) and a company called Vaxobuzz (Pty)
Ltd (Vaxobuzz).

The applicants and the companies sought to be placed in business rescue
[5] The applicant has brought two of the seven business rescue applications itself,
namely this application against the first respondent, and the application in which
UProps is the company sought to be placed in business rescue .2 Homii has brought
four of the five remaining applications against K1, 3 K7,4 K05 and Umbulumko ,6
respectively.

[6] The seventh, and final, business rescue application was brought by EPH
against Vaxobuzz.7 This application was the application mentioned at the
commencement of this judgment that could not be argued . The reason for that was
that EPH itself had been put into provisional liquidation.

[7] Thus, only six applications were before me for adjudication, and this explains
why I shall henceforth stop referring to the seven applications mentioned at the
commencement of this judgment, and I shall now only refer to six applications.

The affected parties
[8] Six affected parties have exercised their rights in terms of s 131(3) of the Act
to participate in the six business rescue applications.8 Two of those affected parties
oppose the granting of business rescue proceedings and four support such orders
being granted.

2 Case number 2025-120747: A1 Capital (Pty) Ltd v Uli Props (Pty) Ltd.
3 Case number 2025-120725: Homii Lifestyle (Pty) Ltd v K2017659651 (SA) (Pty) Ltd.
4 Case number 2025-120714: Homii Lifestyle (Pty) Ltd v K2017659127 (SA) (Pty) Ltd.
5 Case number 2025-120731: Homii Lifestyle (Pty) Ltd v K2018043790 (SA) (Pty) Ltd.

5 Case number 2025-120731: Homii Lifestyle (Pty) Ltd v K2018043790 (SA) (Pty) Ltd.
6 Case number 2025-120738: Homii Lifestyle (Pty) Ltd v Umbulumko Knowledge Services (Pty) Ltd.
7 Case number 2025-120704: Educor Property Holdings (Pty) Ltd v Vaxobuzz (Pty) Ltd.
8 Section 131(3) of the Act reads as follows: ‘ Each affected person has a right to participate in the
hearing of an application in terms of this section’.

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[9] The two affected parties who have opposed the business rescue applications
are Nedbank Limited (Nedbank) and the Unemployment Insurance Fund (the UIF) and
they are involved in all six of the business rescue applications. There is no dispute that
they are affected parties, as each was notified of the business rescue applications as
is required by the provisions of s 131(2)(b) of the Act.9

[10] Nedbank and the UIF assert that they are substantial creditors of all six of the
companies sought to be placed under business rescue ; indeed, that they are the
largest creditors of those six companies. They have both delivered affidavits resisting
the granting of the business rescue applications in all of the business rescue
applications and have brought counter-applications in each seeking orders of liquidation
in terms of the provisions of s 131(4)(b) of the Act in the event of the business rescue
applications being unsuccessful.

[11] The four affected parties who adopt a contrary view , and who support the
commencement of business rescue proceedings, are private companies called FCMB
(Pty) Ltd (FCMB), Infinity Group SA (Pty) Ltd (Infinity), Siyaya Project Management
(Pty) Ltd (Siyaya) and RSA Boss Protection (Pty) Ltd (RSA Boss) . The se four
companies, which I will collectively refer to as the ‘pro rescue companies’, all appear
to be service providers to the companies sought to be placed under business rescue.

[12] Each of the pro rescue companies has delivered affidavits in which they
expressed what can only be described as their fervent support for the granting of the
business rescue applications. Each of them has largely echoed what the applicant has
stated in its founding affidavit in various permutations . Each believe that the
companies sought to be placed in business rescue can all be saved for the reasons
expressed by the applicant.

[13] All of the pro rescue companies feature as affected parties in all of the

[13] All of the pro rescue companies feature as affected parties in all of the
business rescue applications, except for this application. In this application, only RSA

9 Section 131(2) of the Act reads as follows:
‘An applicant in terms of subsection (1) must -
(a) serve a copy of the application on the company and the Commission; and
(b) notify each affected person of the application in the prescribed manner.’

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Boss claims to be an affected party . This claimed status is, however, disputed by
Nedbank.10 I shall assume, without deciding, that RSA Boss is an affected party.

[14] In summary, RSA Boss has submitted in its affidavit that there are no
deficiencies in the applicant’s papers, that there are reasonable prospects that the first
respondent may be restored to solvency or that being placed in business rescue may
result in a better return for its creditors, and asserts, further, that the application is not
vexatious or an abuse of the processes of the court. So close does the case presented
by RSA Boss dovetail with the applicant’s case that its fate is inextricably linked with
the fate of the applicant’s application.

[15] Only two of the pro rescue companies were initially represented on the first
day of the two-day hearing, namely Infinity and Siyaya. On the second day of hearing,
counsel for RSA Boss appeared, apparently having been unable to attend the first day
of the hearing due to the financial constraints of his client . Despite delivering an
affidavit in support of the business rescue applications, FCMB was not present when
the matter was argued and consequently played no part in the hearing.

The agreed approach
[16] When the six business rescue applications were called, it was agreed between
all counsel then present that only this application would be argued, as the issues in it
are common to the five other business rescue applications. As Mr Harpur SC, who
appears for all of the applicants together with Mr Gevers, submitted, there are ‘themes’
in this application that resonate in the five other applications that accordingly permitted
the arguing of only one of the applications.11

[17] It was, finally, expressly agreed that the order that would issue in this application
would then be deemed to have also been granted in each of the other five business
rescue applications.

rescue applications.

10 I assume that Nedbank has taken this position because the applicant did not cite RSA Boss as an
affected party when launching the business rescue application against the first respondent and did not
give it the required notice.
11 Mr Harpur indicated on the morning of the second day of argument that he now wished to deal with
the business rescue plan relating to a property owning company, the first respondent not being such a
company. Despite the agreement reached the previous morning, he was granted the opportunity to do
so.

7
The history of the Nedbank litigation
[18] This history is a labyrinthine one. It must, unfortunately, be discussed in some
detail in order to properly frame the backdrop against which the business rescue
applications are presented, and it will also help to provide the context for Nedbank and
the UIF’s argument that the business rescue applications are nothing but a further
manifestation of an ongoing strategy of delay employed by the A1 Group. That strategy
has, according to Nedbank (and the UIF), allegedly been devised and implemented in
order to thwart the hearing of ten liquidation applications that Nedbank has brought
against companies forming part of the A1 Group (the ten liquidation applications).

[19] The ten liquidation applications brought by Nedbank sought to liquidate the
following companies:
(a) The first respondent in this application;
(b) UProps;
(c) Vaxobuzz;
(d) K1;
(e) K7;
(f) K0;
(g) Umbulumko;
(h) Lococo 3;
(i) Lococo 4; and
(j) Old iStudy (collectively referred to as ‘the ten companies’).

[20] The history of this matter commences i n 2018, when Nedbank loaned large
sums of money directly to eight of the ten companies:
(a) The first respondent was loaned an amount of R410 million;
(b) UProps was loaned R45.6 million;
(c) K0 was loaned 49.5 million;
(d) Umbulumko was loaned R81.5 million.
(e) Lococo 3 was loaned R46.06 million;
(f) Lococo 4 was loaned R106 million;
(g) Old iStudy was loaned R20.5 million; and
(h) Vaxobuzz was loaned R47.4 million.

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[21] The sum of the loans made by Nedbank to these eight companies was thus in
excess of R800 million. No loans were made by Nedbank directly to K1 and K7, the
two other companies that make up the ten companies, but those two companies
provided guarantees to Nedbank in respect of the loan advanced to the first
respondent. Their liability was each fixed at a maximum amount of R410 million.

[22] UProps, K1, K7, K0 and Umbulumko are all property owning companies,
unlike the first respondent. When referring specifically to them, I shall refer to them
collectively as ‘the property owning companies ’. As security for their obligations to
Nedbank, the property owning companies all passed mortgage bonds , or sectional
mortgage bonds where appropriate, over the immovable properties that they owned in
favour of Nedbank. The existence of these mortgage bonds has considerable
significance, as will be discussed later. In addition, each of the mortgage bonds
contained a cession in favour of Nedbank of all rentals and other revenues of
whatsoever nature as might accrue from time to time from the mortgaged properties.
This, too, has significance.

[23] For reasons that need not be explored, none of the companies that received
loans from Nedbank were able to repay them as had been agreed. Numerous addenda
to the original loan agreements were concluded over the period from April 2020 to
March 2023, in which Nedbank repeatedly agreed to extensions of the time periods
within which the loans had to be repaid. For example, the period for the repayment of
the loan advanced to Lococo 3 was extended on no less than seven occasions through
the conclusion of seven addenda to the original loan agreement.

[24] Ultimately, however, Nedbank granted no further extensions and demanded
repayment of all the loans that it had advanced. W hen the demanded repayments
were not forthcoming , Nedbank caused formal demands in terms of s 345 of the

were not forthcoming , Nedbank caused formal demands in terms of s 345 of the
Companies Act 61 of 1973 (the Old Companies Act) to be delivered to the ten
companies at their respective registered addresses in July 2023. No attempts were
made by the addressees of those demands, including the first respondent, to pay the
amounts demanded of them or to secure or compound th ose amounts to the
reasonable satisfaction of Nedbank.

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[25] The natural consequence of this indifference by the companies of which
demand was made was the preparation of the ten liquidation applications by Nedbank.
They were launched on 3 October 2023.

[26] Despite the inherent urgency that attaches itself to liquidation applications, 12
Nedbank has not yet been able to complete its argument for interim orders of
liquidation in the ten liquidation applications, notwithstanding the passing of more than
two years since they were first launched. This is because:
(a) When initially set down, the ten liquidation applications were adjourned by the
judge then presiding for the filing of further affidavits and heads of argument.
(b) The ten companies each then delivered notices in terms of Uniform rule
35(13), calling for discovery to be made by Nedbank in each of the ten liquidation
applications.13
(c) Nedbank was not inclined to comply with the discovery notices and that led to
a full opposed motion being argued before me on 13 May 2024 , in which the ten
companies endeavoured to persuade me to order the discovery that they demanded.
As in this application, only one of the ten discovery applications was argued (the
discovery application), and the decision arrived at in that matter was deemed to have
been handed down in the other nine liquidation applications. I delivered judgment on
22 May 2024 in which I dismissed the discovery application.
(d) The ten liquidation applications were then set down for argument over the
period from 18 to 21 June 2024 in the High Court, Durban. The first day of that hearing
was consumed by an application for leave to appeal against my judgment dismissing
the discovery application. A w ritten judgement was prepared overnight and was
delivered the next morning, 19 June 2024, refusing the application for leave to appeal.
(e) Counsel for the ten companies, Mr Harpur, then asked for the matters to stand
down in order for him to prepare an application for an adjournment pending an

down in order for him to prepare an application for an adjournment pending an
application to the Supreme Court of Appeal for leave to appeal the dismissal of the
discovery application. I permitted this to occur, but fixed truncated times for the
delivery of the application. That application was argued on the afternoon of 20 June
2024 and was, again, dismissed by a written judgment delivered the following morning.

12 Van Greunen v Sigma Switchboard Manufacturing CC [2003] ZAECHC 12 para 9.
13 Uniform rule 35(13) provides as follows: ‘The provisions of this rule relating to discovery shall mutatis
mutandis apply, in so far as the court may direct, to applications.’

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(f) Despite the fact that the two judgments delivered during that session were
prepared overnight and in great haste in an attempt to maximise the available time ,
the period assigned for the hearing of the ten liquidation applications was consumed
by these two applications and the ten liquidation applications were then, finally,
adjourned to 19 to 22 August 2024 , for argument before me in the High Court,
Pietermaritzburg.
(g) The ten companies then applied to the Supreme Court of Appeal for leave to
appeal my refusal of the discovery application.
(h) On 19 August 2024, being the first day of the period allocated for the argument
of the ten liquidation applications in the High Court, Pietermaritzburg, the outcome of
the ten companies’ application to the Supreme Court of Appeal for leave to appeal
was not yet to hand and I felt that it was prudent to await that decision before
proceeding with the ten liquidation applications.
(i) There were, however, three other applications that were not affected by the
pending decision of the Supreme Court of Appeal, and they were enrolled for argument
before me on 19 August 2024. These applications involved applications by the Public
Investment Corporation (PIC)/Government Employees Pension Fund for leave to
intervene in three of the pending ten liquidation applications, namely those involving
Lococo 3, Lococo 4 and Old iStudy . If granted leave to intervene, th ose applicants
also sought orders of liquidation against the three companies just mentioned .
Argument in the intervention applications commenced on 20 August 2024 and
proceeded until mid-morning on 21 August 2024. Mr Harpur, who acted for Lococo 3,
Lococo 4 and Old iStudy, was on his feet at about 10h45, when he enquired if I would
be amenable to take the short adjournment a little earlier than normal. The purpose
behind this request, so I was told, was that Mr Harpur wanted to take instructions from

behind this request, so I was told, was that Mr Harpur wanted to take instructions from
his attorney and his junior as to whether he had addressed me on all the issues that
he needed to cover. I, naturally, agreed to his request. But when the court reconvened
15 minutes later, Mr Harpur handed up business rescue applications that he ultimately
conceded he had prepared in respect of the three companies to which the intervention
application related. The reason given to me for the matters standing down was
palpably not the reason advanced by Mr Harpur.
(j) The existence of the three business rescue applications was thus first
disclosed on 21 August 2024 in the High Court, Pietermaritzburg. Th ose business
rescue applications were, however, not set down before that court, but rather before

11
the High Court, Durban. They were also not set down as matters of urgency, nor was
a preferential date of hearing sought when enrolling them. They were simply set down
in the ordinary course.
(k) On 4 September 2024, the Supreme Court of Appeal dismissed the application
for leave to appeal the judgment in the discovery application.
(l) That decision was not accepted and thus an application for leave to appeal
was made to the Constitutional Court.
(m) The three business rescue applications involving Lococo 3, Lococo 4 and Old
iStudy, first mentioned in the High Court, Pietermaritzburg before me, were allocated
to my sister, Singh J, for hearing, and she eventually heard them in the High Court,
Durban on 5 and 6 December 2024 and dismissed them in a judgment delivered on
19 February 2025.
(n) Inevitably, an application for leave to appeal the judgment of Singh J was
heard by the learned judge but was dismissed by her.
(o) On 11 April 2025, t he Constitutional Court refused leave to appeal the
judgment in the discovery application.
(p) An application for leave to appeal the dismissal of the three business rescue
applications by Singh J was made to the Supreme Court of Appeal but was also
refused by it.
(q) The Judge President of this division then directed that the seven liquidation
applications be heard by me in the High Court, Durban on a preferential basis on 23
and 24 July 2025.14
(r) Pursuant to that direction by the Judge President , I convened a virtual pre-
argument conference to ensure, given the immediate history of the matters, that the
argument proceeded smoothly and without further obstacles on 23 and 24 July 2025.
At that conference, I was informed by Mr Harpur that his clients might seek an
adjournment of the seven liquidation applications. In the event of that being what the
seven respondents decided to do , I accordingly issued directives on the filing of
affidavits and heads of argument. There was no mention whatsoever of any pending

affidavits and heads of argument. There was no mention whatsoever of any pending
business rescue applications.

14 There were now seven liquidation applications because three of the ten liquidation applications were
before Singh J in the form of business rescue applications.

12
(s) Applications to stay the seven liquidation applications were duly delivered on
11 July 2025 and were met with answering affidavits delivered by Nedbank on 17 July
2025.
(t) I heard the applications to stay the seven liquidation applications on 23 July
2025 and dismissed them all with costs.
(u) Finally, I began to hear argument in the seven liquidation applications later in
the day on 23 July 2025 . Mr Rood SC, who appeared for Nedbank with Mr Bester,
addressed me until the afternoon session, when Mr Harpur then commenced his
argument. He advised me that seven business rescue applications were in the process
of being issued. The next morning, 24 July 2025, the seven business re scue
applications were duly handed up. The provisions of s 131(6) of the Act dictated that I
hear no further argument and the seven liquidations applications were all consequently
adjourned sine die.

[27] All of these facts have combined to preclude Nedbank from completing its
argument in support of provisional orders of liquidation. I shall have more to say about
these events later in this judgment.

The history of the UIF’s litigation
[28] In March 2019, the UIF concluded a loan facility with Homii, described as being
a ‘Mezzanine Facility Agreement’ (the Mezzanine agreement) . I n terms of that
agreement, it advanced a loan to Homii in an amount of R410 million. Homii then
breached its obligations in terms of the Mezzanine agreement in that it did not repay
the loan or any interest on the loan amount, nor did it provide the UIF with its annual
financial statements. It presently owes the UIF an amount of approximately R845
million.

[29] As security for the Mezzanine agreement, the first respondent delivered to the
UIF a cession agreement , in which its shares were ceded as continuing general
covering collateral security and as a pledge . The first respondent further secured
Homii’s indebtedness to the UIF by providing the UIF with a written guarantee.

Homii’s indebtedness to the UIF by providing the UIF with a written guarantee.
Because of Homii’s default relating to the Mezzanine agreement and by virtue of the
guarantee provided, it is alleged that the first respondent is now indebted to the UIF in
the same amount owed by Homii.

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[30] The UIF is, in addition, the owner of 42 percent of the shareholding in the first
respondent. The PIC acquired this interest in May 2018 and advanced a R90 million
shareholder loan to the first respondent as part of this transaction. While the
shareholding is in the name of the PIC , the beneficial owner of the 42 percent
shareholding is the UIF. There is no dispute over this.

[31] While it has no direct bearing on the issues in this matter, it is prudent to
mention the unhappy relationship between the PIC and the UIF on the one hand, and
the first respondent and Homii on the other . The relationship has been both fractious
and litigious.

[32] Upon default by the first r espondent of its obligations in terms of the
Mezzanine agreement, the UIF perfected the cession of the first respondent’s shares
and then considered assert ing its rights by convening a general meeting of
shareholders and appointing a new board of directors. Seemingly as a precautionary
measure, the UIF and the PIC brought motion proceedings in the High Court, Pretoria,
in which they sought declaratory relief confirming their entitlement to exercise voting
rights over the first respondent’s shares in Homii and directing the convening of a
shareholders meeting. That relief was granted to it on 30 July 2024.

[33] The first respondent and Homii attempted to secure leave to appeal that
decision, which was initially unsuccessful in the court of first instance . However, the
Supreme Court of Appeal granted leave to appeal on 3 December 2024. The PIC and
the UIF thereafter brought an application in terms of s 18(3) of the Superior Courts Act
10 of 2013 to render the declaratory order of 30 July 2024 immediately enforceable
pending the appeal. That application was granted on 13 December 2024 . The first
respondent and Homii appealed th is order, which appeal was dismissed by the full
court. The first respondent and Homii have now approached the Constitutional Court

court. The first respondent and Homii have now approached the Constitutional Court
for leave to challenge the full court's dismissal of the appeal against the execution
order.

[34] The UIF also regards the bringing of this application as a further attempt by
the A1 Group to frustrate its enforcement of its already perfected rights.

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[35] And so, on to the business rescue application.

The business rescue application
Introduction
[36] A court may grant an application for business rescue if, inter alia, it is satisfied
that the juristic entity sought to be placed under supervision and subject to business
rescue proceedings is financially distressed, if it is just and equitable to rescue it for
financial reasons and if there is a reasonable prospect of successfully rescuing the
entity.15

[37] Such proceedings are not to be approached in a leisurely fashion by an
applicant. They are to be approached with the max imum possible expedition and at
the first possible opportunity.16 They must, accordingly, be initiated when the company
in question first begins to show signs of distress and preferably before that distress
morphs into actual insolvency .17 As was stated in DH Brothers Industries (Pty) Ltd v
Gribnitz NO and Others:18
‘Business rescue proceedings are geared at providing a window of opportunity to restore an
ailing company to financial health and functionality ... The window of opportunity does not
remain open indefinitely. It follows, therefore, that the legislature will impose and retain such
a moratorium only where, in addition to there being a reasonable prospect of rescuing the
company, the provisions concerning business rescue proceedings are timeously complied
with.’

[38] An important consideration when assessing a business rescue application is
to recognise that such proceedings are not intended to be utilised simply as an
informal, alternative, winding-up procedure that has the effect of bypassing the long -
established liquidation procedures, and accountability provisions , that exis t in our
law.19


15 Section 131(4) of the Act. See also: Diener NO v Minister of Justice and Correctional Services and
Others [2018] ZACC 48; 2019 (4) SA 374 (CC) para 54.
16 Koen and Another v Wedgewood Village Golf & Country Estate (Pty) Ltd and Others 2012 (2) SA 378

(WCC) (Wedgewood Village) para 10.
17 Schipper v Tirisano Property Group (Pty) Ltd and Others [2024] ZAWCHC 125 para 96.
18 DH Brothers Industries (Pty) Ltd v Gribnitz NO and Others 2014 (1) SA 103 (KZP) para 27.
19 Oakdene Square Properties (Pty) Ltd and Others v Farm Bothasfontein (Kyalami) (Pty) Ltd and
Others [2013] ZASCA 68; 2013 (4) SA 539 (SCA) (Oakdene (SCA)) para 33.

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Financial distress
[39] The applicant submits that the first respondent is financially distressed . It
seems to me that this must be the case, and I do not believe that any of the affected
parties have expressed views to the contrary. Nedbank and the UIF, in fact, allege the
existence of financial distress of the most extreme kind, namely, insolvency.

[40] If there was a need for further proof of financial distress, it is to be found in a
document entitled:
‘Business Rescue Plan Prepared for:
Urban Lifestyle Investment Holding (Pty) Ltd’,
compiled by Dr Karl Gribnitz (Dr Gribnitz) , which is attached as an annexure to the
founding affidavit in this application and which constitutes the fulcrum around which
this application rotates. I shall refer to this document henceforth as ‘the Gribnitz plan’.

[41] Contained within the Gribnitz plan is, inter alia, a narration of the assets
possessed by the first respondent. As Dr Gribnitz records, the first respondent had at
the time that his plan was prepared, but R1 600 in its bank account, at a time when its
liabilities exceeded its assets by over R300 million . It is un questionably financially
distressed.

[42] As to why this should be the case, the Gribnitz plan is singularly unhelpful.
Under a heading that reads ‘ Reasons provided by the Directors as to why the
Company is in Distress’, the following appears:
‘The Directors have considered the financial affairs of the Company and reasonably believe
the Company to be financially distressed within the meaning of section 128(1)(f)(i) of the Act,
as it will be unable to pay its debts as they become due and payable within the immediately
ensuing six months for the following reasons:
a. The Company is unable to pay its debts as they fall due and its operations
need to be restructured.’

[43] No explanation at all is accordingly provided for the existing financial distress.
I am, nonetheless, satisfied that it is real, and it exists.

16
[44] Thus, the true issue in the business rescue application is whether there is a
reasonable prospect of the first respondent being successfully rescued. The applicant
bears the onus of establishing this.20

The Gribnitz plan
[45] The applicant chose to discharge the onus that it bears through the
presentation of the Gribnitz plan . That plan, says the applicant , and RSA Boss ,
demonstrates that there is a reasonable prospect that the first respondent might yet
be saved.

[46] The deponent to the applicant’s founding affidavit, Mr Melvin Munsami (Mr
Munsami), presently a director of the first respondent, makes it plain that the applicant
relies entirely upon the Gribnitz plan to establish the essential requisites for an order
of business rescue. Mr Munsami puts it this way:
‘34. In support thereof I annex hereto marked “C1” a draft proposed business rescue plan
prepared by an independent expert Dr Karl Gribnitz and his qualifications and experience
evidencing his ability and fitness to provide expert evidence, marked “C2” and a S upporting
Affidavit by him confirming this.
35. The draft proposed business rescue plan furnishes further details as regards the
financial distress of the First Respondent and the related companies and proposes a viable
solution which reflects that there is a reasonable prospect for rescuing the First Respondent,
or, as contemplated by Section 128(1)(h) 21 if that is not possible, providing a plan that will
achieve a better return for the First Respondents creditors and the payment that they would
receive as compared with whether the first respondent ha d simply been liquidated
immediately.’

[47] Mr Munsami did not deal thoroughly with the contents of the Gribnitz plan in
the founding affidavit but simply referred to it in gen eral terms. This is undesirable,
because, as Koen JA put it in Selective Empowerment Investments Ltd v Companies

20 Propspec Investments (Pty) Ltd v Pacific Coast Investments 97 Ltd and Another 2013 (1) SA 542

(FB) (Propspec) para 11; Wills v Seed to Plant Properties (P ty) Limited and Others [2025] ZAGPJHC
1337 para 15.
21 It seems to me that this is an erroneous reference and should, perhaps, be a reference to
s 128(1)(b)(iii). Section 128(1)(h) refers to the definition of ‘rescuing the company’.

17
and Intellectual Property Commission:22
‘… a party to litigation is not required to trawl through annexures to an affidavit to identify what
might or might not possibly be relevant and relied upon.’

[48] That is, regrettably, what has had to be done in order to distil which parts of
the Gribnitz plan are relied upon by the applicant.

[49] The Gribnitz plan is the basis upon which the applicant’s business rescue
application rests. Confusingly, it is, however, unlikely to be the business rescue plan
that will be implemented if the business rescue application succeeds , t his
notwithstanding its title that it is a business rescue plan prepared for the first
respondent. This is because Dr Gribnitz will not be the business rescue practitioner
who will be appointed if the application is granted. The business rescue practitioner
who will be appointed is Mr Karunagaren Naidoo (Mr Naidoo) and he appears not to
have been involved at all in the preparation of the Gribnitz plan. He may, presumably,
have different views on the way forward if he is appointed.

[50] It appears to me that in adopting this strategy, the applicant seeks to claim the
benefits of the best of both worlds . If the Gribnitz plan establishes a point that
advances the prospects of business rescue, then that ought to be accepted by this
court. If, however, the Gribnitz plan does not establish a n essential fact or is found
wanting on an issue, then it is to be ignored because the Gribnitz plan is not intended
to be the actual business plan that will finally be put into operation if the business
rescue application succeeds. This argument was employed liberally by Mr Harpur, who
indicated at different stages that the Gribnitz plan was simply ‘illustrative’.

[51] The Gribnitz plan is difficult to comprehend because it refers to events that
have allegedly occurred, when it is common cause that they have not occurred. A
single example will suffice:

single example will suffice:
‘The Minutes and a recording of the First Meeting of Creditors held on Friday, 15 August 2025

22 Selective Empowerment Investments Ltd v Companies and Intellectual Property Commission [2025]
ZASCA 71; 2025 (6) SA 495 (SCA) para 23, with reference to Minister of Land Affairs and Agriculture
and Others v D & F Wevell Trust and Others [2007] ZASCA 153; 2008 (2) SA 184 (SCA) para 43.

18
is available. This recording may be transcribed in future if so required. The appointment of the
Practitioner was ratified by the Creditors present and voting at the meeting.’

[52] No such meeting has occurred and therefore no recording can exist. There
are several similar statements in the Gribnitz plan. It is not clear to me why this
approach was adopted.

[53] Putting this misgiving to one side, i f the Gribnitz plan does establish what Mr
Munsami says it establishes, then it appears to me that the application for business
rescue ought to be granted. The protection and rehabilitation of viable companies is,
after all, what the Act favours.23 The converse argument obviously also applies: if the
Gribnitz plan does not establish what Mr Munsami claims it does, then the business
rescue application has no prospects, and the counter-applications of liquidation move
from the background to the foreground.

[54] The Gribnitz plan is thus of cardinal importance in establishing the reasonable
likelihood of the salvation of the first respondent . It must , therefore, of necessity, be
carefully considered to see if it does offer any reasonable hope of rescue or whether
what it proposes is merely a fantasy presented as reality.

[55] Dr Gribnitz commences his plan on a cautionary note, which reads as follows:
‘The proposals in this Plan are based on the information provided by management, and, due
to time constraints, no independent verification thereof could be undertaken. Therefore, the
estimates and projections in the Plan are based on information provided by the management
and experience of the drafter here of, Dr Karl J Gribnitz.’

[56] Accepting this to be correct, it appears to me that all that Dr Gribnitz knows of
the state of the first respondent’s business is therefore what its management has told
him. Logically, what he was told by the management of the first respondent may be
accurate, or it may be inaccurate, or it may be a mixture of both. Dr Gribnitz does not

accurate, or it may be inaccurate, or it may be a mixture of both. Dr Gribnitz does not
know himself which of these alternatives may apply to what he has been told because

23 Cape Point Vineyards (Pty) Ltd v Pinnacle Point Group Ltd and Another (Advantage Projects
Managers (Pty) Ltd Intervening) 2011 (5) SA 600 (WCC) (Cape Point Vineyards) para 6.

19
he has not personally verified the information that he has received. This, at the very
outset, is problematic.

[57] The Gribnitz plan is therefore not constructed upon any independent,
objective, verified data or information. All the information that has been provided to Dr
Gribnitz emanates from the very people who had plotted the course of the first
respondent and who had their hands on the tiller when the first respondent initially ran
aground. Their objectivity may legitimately be open to question.

[58] Moving on to the substance of Dr Gribnitz’s plan, it has, in its essence, but two
component parts which are:
(a) a proposal to restructure ‘the group’; and
(b) the development of a business rescue plan.

[59] Each of these components will be considered.

Component one: Restructuring the group
[60] Dr Gribnitz summed up the first component of his plan as follows:
‘This Business Plan forms part of a restructure of the affairs of the entire group . Once the
assets and certain liabilities held by the subsidiaries are transferred to the Company, a further
restructure of the group will occur.’ 24

[61] What ‘group’ Dr Gribnitz was referring to is not defined by him, and I am
obliged to cautiously assume that he was referring to the A1 Group as I have defined
it. But I may very well be wrong in this assumption, given the vagueness of the Gribnitz
plan on this issue.

[62] The proposed restructuring requires the first respondent to acquire the assets
held by its ‘subsidiaries ,’ which can only be a referral to the property owning
companies, and for them to be:
‘… amalgamated into the Company via an acquisition of the properties from its subsidiaries.
In addition to moving the assets (properties and other assets) into the Company, the liabilities

24 The reference to ‘the Company’ in this extract, and in the other extracts cited, is a reference to the
first respondent.

20
owing to the creditors of the subsidiaries will also be transferred, either in part or in whole, to
the Company.’ (Underlining added)

[63] Dr Gribnitz goes on to state that:
‘The Practitioner is of the opinion that if all the assets (land and buildings) and debt of the
subsidiaries are acquired by the Company under the business rescue plans of the
subsidiaries, the resulting amalgamation of the assets and debt in a single comp any will
resolve the section 45 issues.’ 25

[64] As regards the mechanics of how the immovable properties are to be acquired
by the first respondent, Dr Gribnitz proposes that:
‘The Company will make an offer the acquire (sic) the properties of the subsidiaries, where
the value of the properties has been reduced by 25% across the board, and where the
Business Rescue practitioner will determine the values all the properties in conjunction with
professional property practitioners.’

[65] Dr Gribnitz proposes two distinct ways of treating the indebtedness of the first
respondent to Nedbank and the UIF. As regards Nedbank, he states that the first
respondent’s facility with it would have to be restructured. What would happen is tha t
the debt would be reduced to only reflect the capital portion of the debt owed to
Nedbank, said by Dr Gribnitz to amount to the sum of R385 million, and would, at least
initially, exclude any interest, and which amount would be repaid as follows:
‘Nedbank provides a six-month repayment holiday, where the proceeds of the properties are
used to pay dividends to all the creditors other than Nedbank and the UIF as set out in the
subsidiaries; The Nedbank loan is restructured over ten years at the same interest rate as set
out in the original loan agreement dated December 2018. All the Nedbank securities in terms
of bonds will remain in place, and a cession on the securities can be noted.’

[66] Concerning the UIF, Dr Gribnitz proposes the following:

[66] Concerning the UIF, Dr Gribnitz proposes the following:
‘To restructure the UIF Mezzanine loan owed by Homii to being only the capital amount: the
loan will be moved from Homii to the Company as a shareholder loan that will total R500
million; The shareholder loan will be converted into a convertible preference share that will be
redeemed equal to seventy-five percent of the retained profits with a zero dividend; The

25 Despite not being the person who is to be appointed as the business rescue practitioner if the
application succeeds, Dr Gribnitz, confusingly, continues to refer to himself as ‘the Practitioner’.

21
preference shareholder will have the right to appoint two directors to the board of the
Company.’

Component two: The development of a business rescue plan
[67] The second part of the Gribnitz plan was the development by the appointed
business rescue practitioner who, as already mentioned, is not to be Dr Gribnitz, of a
turnaround plan. It bears repeating that the Gribnitz plan, styled by its author as being
a ‘Business Rescue Plan’ is, in fact, not the business rescue plan that will be
implemented if this application succeeds.

[68] As Mr Rood pithily submitted, all that the Gribnitz plan amounted to in this
regard was a proposal that a plan be devised to develop a plan.

The opposition to the Gribnitz plan
[69] Both Nedbank and the UIF oppose the granting of an order permitting the first
respondent to be placed under supervision and in business rescue. I do not intend to
deal separately with their submissions in this regard but shall deal with the princip al
points of objection when analysing the Gribnitz plan.

[70] But, summarised, their objection is that the business rescue application has
been brought in bad faith and that the Gribnitz plan fails to establish the necessary
grounds that would permit supervision and business rescue proceedings to be ordered
for the first respondent. In particular, both assert that there is no reasonable prospect
of the first respondent being rescued and that liquidation is called for in the
circumstances.

[71] Mr Rood advised me from the bar that Nedbank would not agree to Dr
Gribnitz’s plan but so much is also stated by the deponent to Nedbank’s answering
affidavit. Likewise, Mr Wasserman SC, who appears together with Mr Msomi for the
UIF, also indicated from the bar that the UIF would not accept such a proposal.

Analysis
[72] In analysing the Gribnitz plan, I acknowledge that there is no requirement at
all at this stage of proceedings that such a business rescue plan should exist. Mr

22
Harpur argued forcefully , and repeatedly , that it was for the business rescue
practitioner appointed to perform th e task of putting together the actual business
rescue plan. I accept that to be the case, for s 140(1)(d)(i) of the Act states that this is
one of the responsibilities of the business rescue practitioner appointed.26

[73] It would be foolhardy to attempt to lay down how an applicant should go about
presenting its case to demonstrate the existence of a reasonable prospect of rescue
of a distressed company. However, it is safe to state that the founding papers in the
business rescue application must contain sufficient factual details to enable the court
to determine whether the business rescue practitioner will probably have a viable basis
to rescue the company. 27 Thus, a party cannot simply present an application for
business rescue to the court on flimsy grounds and:28
‘… in the hope that the practitioner will provide the panacea to its problems. The application
must set out sufficient facts, if necessary augmented by documentary evidence, from which a
court would be able to assess the prospects of success before exercising its discretion.’
In other words, before there is a business rescue practitioner in place, this court must
be satisfied that such a person should first be appointed.

[74] The applicant has chosen to attempt to satisfy the court that business rescue
proceedings should be ordered through the presentation of the Gribnitz plan . It,
therefore, does not assist it to assert that there is no need for a business rescue plan
to now exist, as it has done, repeatedly. The fact of the matter is that this is the method
that the applicant has chosen to persuade this court that business rescue proceedings
are appropriate and should be ordered . Conceivably, the applicant could have
presented its case in another way that did not rely on the Gribnitz plan , for example,
by putting up audited financial records , or current financial documents, all supported

by putting up audited financial records , or current financial documents, all supported
by affidavits, but it chose the form of the Gribnitz plan as the way to achieve its aims.

26 Section 140(1)(d)(i) of the Act reads as follows:
‘(1) During a company’s business rescue proceedings, the practitioner, in addition to any other
powers and duties set out in this Chapter -
…
(d) is responsible to -
(i) develop a business rescue plan to be considered by affected persons, in accordance
with Part D of this Chapter…’
27 Wedgewood Village para 17.
28 Nedbank Ltd v Bestvest 153 (Pty) Ltd; Essa and Another v Bestvest 153 (Pty) Ltd and Others 2012
(5) SA 497 (WCC) para 41.

23
Thus, it is that document that must bear the strain of scrutiny and it serves no purpose
for the applicant to state that such a plan need not now exist. Given the choice made
by the applicant, if it did not exist, its application would be stillborn. It is accordingly the
Gribnitz plan that must convince me that business rescue proceedings should be
ordered.

[75] It seems to me that to authoritatively motivate for business rescue for the first
respondent, the person recommending that solution should have fairly considered the
first respondent’s financial position and should be able to provide information on the
true state of the first respondent’s current financial position and how it arrived at that
point. A natural starting point to acquire that essential information would be the
company’s financial statements. T his was emphasised by th e Supreme Court of
Appeal in African Banking Corporation of Botswana Ltd v Kariba Furniture
Manufacturers (Pty) Ltd and Others,29 where the court observed that:
‘[33] The fact that both the resolution to commence business rescue and the business
rescue plan were based on financial statements which were more than five years old,
presented a fundamental difficulty for a proper assessment of prospects of business rescue.
Generally, the factual basis for assessment of the true financial position of a company is its
(latest) financial statements (and, where necessary, its management accounts). And the
business rescue plan must conclude with a certificate by the practitioner t hat the actual
information provided appears to be accurate, complete and up to date. Although the business
plan had the required certificate, it was clearly not correct. For obvious reasons the 2005
financial statements could not, on their own, in January 2012, form a proper basis for an
assessment of reasonable prospects of rescuing Kariba.
[34] The true state of Kariba's affairs as at January 2012 and its anticipated operations

[34] The true state of Kariba's affairs as at January 2012 and its anticipated operations
could not be established without an update of the books of account, conducted on sound
accounting principles, proper valuation of the company assets, and substantiated prospective
income and expenditure. All these were lacking and no cogent case was made to support an
opinion of reasonable prospects of rescue. Consequently the resolution to commence
business rescue was taken without a proper basis and falls to be set aside. ’ (Footnotes
omitted.)


29 African Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and Others
[2015] ZASCA 69; 2015 (5) SA 192 (SCA) (Kariba).

24
[76] The court referred to ‘financial statements’ in Kariba. The financial statements
of a company are the product of a systematic process of recording, summarising, and
presenting its financial transactions. The financial statements provide an accurate
picture of the company’s financial position over a specific period of time and are
considered to be reliable by virtue of the fact that they are ordinarily not prepared by
the company itself, but by an independent, professional, third party that specialises in
such work. Those statements are intended to allow an outsider to the company an
insight into its financial health. They are compiled using clearly defined rules and must
be delivered to the registrar of the Companies and Intellectual Property Commission
annually.

[77] Another form of financial documentation was also mentioned in Kariba,
namely, management accounts. As th at judgment makes clear, t hey are to be
considered only ‘where necessary’ .30 Management accounts are financial reports
prepared for internal use only , unlike audited financial statements . They are not
intended to be considered by outsiders to the company. No formality attaches to them,
and they may be prepared weekly, monthly, or quarterly or for any other period
deemed necessary. They are designed to assist the management of the company to
gauge its ongoing financial condition. They are not audited accounts and are not part
of a legally -mandated reporting pattern. They may, therefore, be tailored to take on
any form that is desired.

[78] The applicant is acutely aware of the importance of accurately capturing and
portraying the true financial position of the first respondent, for it stated in its founding
affidavit that:
‘The legal position is that the court must assess the company's financial position at the time
the application is heard and not when it is launched. That assessment is not confined to
historical data and must be informed by the most current and reliable financial information

historical data and must be informed by the most current and reliable financial information
available at the time of the hearing. This includes management accounts and updated
operational information where audited financials are not yet finalised or are no longer reflective
of the prevailing conditions.’


30 Kariba para 33.

25
[79] This is a notable statement, but it is not a complete or accurate one. While the
statement mentions management accounts, it does not mention audited financial
statements. The applicant has simply not presented any original, objective financial
information pertaining to the first respondent to this court . All information presented
comes through Dr Gribnitz’s plan and that, on his own version , is based upon
unverified information.

[80] In Kariba, there were financial statements, although they were hopelessly out
of date. In this matter, there are simply no audited financial statements at all. Not even
hopelessly outdated ones. Dr Gribnitz reveals that he had no recourse to any audited
financial statements of the first respondent in preparing his plan. It appears that none
exist. Mr Munsami confirmed this under oath when he stated that:
‘There are no current annual financial statements and the draft business rescue plan was
prepared from the most current management accounts provided.’

[81] Mt Munsami leaves it there. He does not say why this should be the case or
when the last audited financial statements for the first respondent were prepared. I am
afraid that is not good enough. It is not clear when the first respondent last had audited
financial statements prepared for it. The lack of audited financial statements appears
to be endemic throughout the A1 Group.31 The issue of audited financial statements
has simply been ignored by the applicant in the founding affidavit, and no explanation
has been tendered for the fact that none exist. The issue is brushed away with the
repeated mantra that the Act does not require them.


31 On the second day of argument, Nedbank handed in an extract from the Government Gazette of 16
January 2026 (notice no 6999, GG 53956). It contained a notice issued by the Director General of
Higher Education indicating his intention to deregister three companies that provide private educational

services that form part of the Leo Chetty Group of Companies, of which the A1 Group forms part,
namely, City Varsity (Pty) Ltd, Damelin (Pty) Ltd and Icesa City Campus (Pty) Ltd, for a failure to comply
with s 57(2)( b) of the Higher Education Act 101 of 1997. That section provides that a private higher
education institution must, within the period determined by the registrar (currently on or before 30 April
of each year (reg 27(1) of the Registration of Private Higher Education Institutions, 2016)), provide to
the registrar of private higher education institutions a certified copy of an auditor’s report in respect of
its financial statements. Subsequently, o n 27 February 2026, the cancellation of the registration of
Damelin (Pty) Ltd as a registered private higher education institution was published in notice 7171, GG
54218 of that date. The reasons cited for such cancellation included a failure to supply the auditor’s
report previously mentioned. Mr Harpur pointed out that a previous deregistration in 2025 had been
reversed and , as a consequence , it was argued by the applicant in its replying affidavit that what
occurred in 2025 is distinguishable from the current events . But by virtue of what occurred on 27
February 2026, that distinction, if it did exist, can no longer be sustained.

26
[82] That mantra was the source of Mr Harpur’s repeated assertion in argument
that the Act does not require audited financial statements to be considered when
bringing a business rescue application. He is , again, undoubtedly correct in saying
that for, indeed, t he Act makes no mention in its wording of the presentation and
consideration of audited financial statements. But that does not mean that they do not
need to be considered or should not be considered. The Supreme Court of Appeal
stated in Kariba that audited financial statements are essential in determining these
types of applications. They are the obvious starting point when attempting to
understand and define the distressed company’s condition. Audited financial
statements are obviously essential for they would authoritatively define the extent of
the financial difficulties facing the distressed company and would be able to
authoritatively identify when those difficulties commenced and would allow for a proper
consideration as to whether those difficulties could realistically be overcome. If the
problem is not defined and explained , how can its solution be proposed and be
considered to offer a reasonable prospect of rescue?

[83] Thus, the rocky foundation upon which the Gribnitz plan is premised is even
rockier than first appreciated. But, in my view, that foundation becomes even more
questionable when Dr Gribnitz states that he did, in fact, have access to some financial
documentation. This may appear to be paradoxical reasoning: why should the position
be considered to be even more detrimental if financial records were, indeed,
considered by Dr Gribnitz? Let me explain.

[84] Dr Gribnitz s tates in his plan that he, in fact, had access to the first
respondent’s management accounts for an undefined period ending on 31 May 2025.
I can only assume that he was referring to the management accounts when he stated
the following:32

the following:32
‘Based on investigations into the affairs of the Company, the Business Rescue practitioner
determined that the accounts of the Company were an accurate reflection of the financial
position of the company and/all of the debts owing by the company.’


32 As no business rescue practitioner has in fact been appointed, Dr Gribnitz can only be referring to
himself in this extract. If he is not, then the statement is entirely meaningless.

27
[85] Given that Mr Munsami has confirmed that there are no current annual
financial statements, the reference to ‘the accounts of the Company’ can only be a
reference to the management accounts , which apparently do exist, and which Dr
Gribnitz acknowledges consulting. I am not certain how Dr Gribnitz could come to the
conclusion about the accuracy of the management accounts , given his earlier
admission that he did not verify any information that he was given. Moreover, it is not
Dr Gribnitz’s function to pronounce upon the reliability of the only financial documents
that appear to exist. That is the function of this court.

[86] What makes the position for the applicant parlous, and renders Dr Gribnitz’s
opinion questionable , is that the management accounts do not form part of the
application. They are not attached to the Gribnitz plan, nor are they attached to the
founding affidavit.

[87] No explanation whatsoever for this unsatisfactory state of affairs has been
provided. The position is exacerbated by the affidavit delivered by the affected party,
RSA Boss, where its deponent states the following:
‘It is denied that the alleged non-disclosure of management accounts renders the application
defective. The management accounts and supporting documentation are available to the
business rescue practitioner and will be disclosed to affected persons in acco rdance with
section 150 of the Act, which governs the preparation and publication of the business rescue
plan. Infected persons with sufficient information arises at the stage of Considering and voting
on the plan, not at the stage of adjudicating on the application for business rescue.’33

[88] From this, it emerges that t he management accounts will be disclosed to the
affected parties, but not to the court. It is almost impossible to escape the conclusion
that the withholding of the management accounts has been done purposefully. If they
would have unequivocally established the desirability of business rescue proceedings

would have unequivocally established the desirability of business rescue proceedings
being ordered, there can be no doubt that they would have been disclosed by the
applicant in a heartbeat. The fact that none of the persons who deposed to affidavits
in the applicant’s case was prepared to allow Nedbank or the UIF or this court to see
the management accounts invites the inference that they have been purposefully

33 Answering affidavit of RSA Boss, page 015-17, para 7.7.

28
withheld, as they would not support the proposition of business rescue. I can think of
no other reason why they were not disclosed , given the admission that there are no
audited financial statements.

[89] At the centre of the Gribnitz plan is the proposal that the property owning
companies transfer their immovable assets to the first respondent. If this were to
happen, Dr Gribnitz predicts that the resulting amalgamation of the assets and debt s
into a single company ‘will resolve the section 45 issues’. I confess, again, that I do
not understand the logic of this statement. I shall deal with the s 45 issue shortly in
more detail, but for now, it bears mentioning that the point mentioned by Dr Gribnitz,
which is narrated in a quote referred to earlier in thi s judgment, 34 refers to whether
there was compliance with s 45(3) of the Act by the directors of the first respondent at
the time that the loans were negotiated , and concluded, with both Nedbank and the
UIF. This is the principal defence that the companies who are the targets of the ten
liquidation applications raise in resisting their liquidation: s 45 (3) of the Act was not
complied with in 2018 and thus the loan s of over a billion Rand received collectively
from Nedbank and the UIF are all void ab initio.

[90] What I fail to grasp is how a future event , namely the acquisition by the first
respondent of the immovable properties from the property owning companies , can
resolve an issue that allegedly happened eight years ago, which is relied upon by the
applicant and first respondent to avoid liquidation, and which allegedly relates to non-
compliance with a statutory requirement existing eight years ago.

[91] That, however, is not the only thing that I do not understand. Fundamentally,
I do not understand how Dr Gribnitz proposes that the immovable properties are to be
acquired by the first respondent. They cannot simply be taken by the first respondent.

acquired by the first respondent. They cannot simply be taken by the first respondent.
They would have to be acquired from the property owning companies, and for value,
even if the value is reduced by 25 percent, as proposed by Dr Gribnitz . But the first
respondent has no cash with which to acquire them. The extraordinary barrenness of
its coffers was mentioned earlier. It seems that the answer to this is to be found in Dr

34 Mentioned in paragraph 62 of this judgment.

29
Gribnitz stating that the business rescue practitioner would have to seek funding from
a third party.35

[92] During the hearing, Mr Harpur, perhaps anticipating the beginning of the pinch
on this point, attempted to hand up a supplementary affidavit which explored the
possibility of the first respondent receiving financial assistance from two third parties.
The supplementary affidavit was prepared considerably out of time. Initially, Mr Rood
resisted it being handed up , but on the second day of the hearing, he relented and
allowed it to be handed in without objection.

[93] The supplementary affidavit, again deposed to by Mr Munsami, explained that
two financial institutions, namely TUHF Ltd (TUHF) and Paragon Capital Raising (Pty)
Ltd (Paragon), had:
‘13. … provided written confirmations recording their intention, to provide financing for the
immovable properties as proposed in the business rescue plan of the First Respondent.
14. The aforesaid confirmations are contained in two written letters furnished by the
respective funders, which letters confirm an intention to advance funding in an aggregate
amount of R312,000.000 (three hundred and twelve million rands only) in support of the First
Respondent’s business rescue proceedings.'

[94] As far as I can make out, no definitive offer of funding is contained in either
TUHF’s letter or that of Paragon and Mr Munsami’s representation as to what the two
letters state is a gross distortion of their contents. Both letters are dated 27 January
2026 and were clearly prepared in haste and to accommodate the commencement of
the hearing of this application.36

[95] TUHF indicates in its letter that because of the current financial distress of the
first respondent, the conditions upon which it might be willing to assist are:
‘… by necessity, more onerous than our standard lending terms.’
TUHF goes on to state that any final arrangement would be subject to credit approval

TUHF goes on to state that any final arrangement would be subject to credit approval
in terms of its normal credit approval process. There was, therefore, no agreement
captured in that letter.

35 Founding affidavit, page 001-81, para b.
36 This application commenced on 28 January 2026.

30
[96] As regards Paragon’s letter, it records that it had apparently been requested
to make available an amount of R250 million. Its letter, however, was not to be
construed as constituting a binding obligation on Paragon. The letter records that:
‘4. A1 Capital (Pty) Ltd has informed Paragon that the properties are in entities currently
subject to business rescue proceedings in terms of the Companies Act 71 of 2008 (“the
Seller”). The funding would only be available after the commencement of Business Rescue
and is intended to be implemented pursuant to a duly adopted business rescue plan.
5. In these circumstances, the validity, enforceability, and implementation of the funding
are dependent upon the approval and implementation of business rescue plan (s) in
accordance with the Companies Act.
6. Accordingly, and as a material consideration for the provision of a Facility, Paragon
and/or its funding partners require the approval and implementation of a relevant business
rescue plan(s).’

[97] The wording of the Paragon letter makes it clear that its potential involvement
demands the existence of a business rescue plan. If it was told, as it appears to have
been, that the entities in question were already subject to business rescue
proceedings, then it was misled. If business rescue is not ordered , then, on the plain
meaning of the Paragon letter, it will not be in a position to offer any form of funding.

[98] The two letters do not demonstrate an intention to lend an aggregate amount
of R312 million, as Mr Munsami claimed. Far from it. Neither of the letters was definite
in their intentions nor did they offer the funding claimed by Mr Munsami. Mr Harpur
correctly conceded that both the letters were ‘heavily conditional’ . I agree with that
assessment.

[99] After considering their contents , I am of the view that t he two letters did not
constitute an unequivocal commitment to the provision of financial assistance to the

constitute an unequivocal commitment to the provision of financial assistance to the
first respondent and they, consequently, do not advance the applicant’s position.

[100] Without the likelihood of a financial injection being established, it appears to
me that there cannot be the acquisition of the immovable properties from the property
owning companies. This acquisition is fundamental to the Gribnitz plan.

31
[101] However, I am prepared to consider that I may be wrong and that, perhaps,
finance can be found. If finance is found and the properties are acquired from the
property owning companies , then I also do not understand how that acquisition
changes the financial prospects of the first respondent or the property owning
companies. On a purely simplistic level, it appears to me to be a classic example of
the deck chairs being rearranged on the Titanic.37 I do not understand h ow the
acquisition by the first respondent of all the immovable properties will provide a
solution that has not already presented itself when the immovable properties were
individually owned by their original owners. Such a series of transfers , as
contemplated, does not appear to me to create any new value but will, rather, consume
value.

[102] I pointed out to Mr Harpur that if the property owning companies are obliged
to sell their only assets at 75 percent of their true value, as proposed by Dr Gribnitz,
but are only partially released from their liabilities, as appears to also be possible
according to Dr Gribnitz, their future did not appear to be improved by what was being
proposed. Mr Harpur conceded that if this occurred, th e property owning companies
inevitably would have to be liquidated.

[103] I enquired further from Mr Harpur as to what would happen to the immovable
properties acquired by the first respondent if a capital injection was found that
permitted their acquisition. Mr Harpur unequivocally stated that they would be sold. I
began to form the impression that what was actually being intended by the Gribnitz
plan was a private liquidation of the A1 Group.

[104] My understanding that this was what was actually being proposed through the
Gribnitz plan was fortified by the very wording that Dr Gribnitz employed in his plan.
He commenced the introductory summary of his plan with the following words:

He commenced the introductory summary of his plan with the following words:
‘This document sets out the proposed Business Rescue Plan that may result in a better return
for Affected parties as contemplated in section 128(1)(b) of the Act.’


37 A description first used in print in the Canadian publication , The Times Colonist, in December 1972
(https://www.phrases.org.uk/meanings/rearranging-the-deckchairs-on-the-titanic.html).

32
[105] This is not an isolated instance of Dr Gribnitz inadvertently, or mistakenly ,
using these words. He repeats those exact words at the end of his summary of his
plan.38 And he then repeats them a third time.39

[106] The words ‘better return’ feature in s 128(1)(b) of the Act, and read as follows:
‘“business rescue” means proceedings to facilitate the rehabilitation of a company that is
financially distressed by providing for—
(i) the temporary supervision of the company, and of the management of its affairs,
business and property;
(ii) a temporary moratorium on the rights of claimants against the company or in respect
of property in its possession; and
(iii) the development and implementation, if approved, of a plan to rescue the company
by restructuring its affairs, business, property, debt and other liabilities, and equity in
a manner that maximises the likelihood of the company continuing in existence on a
solvent basis or, if it is not possible for the company to so continue in existence,
results in a better return for the company’s creditors or shareholders than would result
from the immediate liquidation of the company…’ (Underlining added.)

[107] The Act thus presents the possibility of a better return for creditors and
shareholders as an alternative to the successful rescue of a company and it continuing
to remain in business. Put differently, the better return is the alternative available if it
is not possible for the company to keep going.40 Dr Gribnitz appears, therefore, in
making the statement , to accept that the first respondent actually cannot be
rehabilitated, but that a better return could be achieved for the affected parties if the
business rescue practitioner attended to the liquidation of assets owned by the first
respondent rather than a liquidator.

[108] There is no real evidence before me to establish th at this will offer a better
return. What is before me are submissions based upon allegedly ‘well -known’

return. What is before me are submissions based upon allegedly ‘well -known’
perceptions of winding -up procedures in general. For example, Mr Munsami makes
submissions on the range of commissions charged by auctioneers, without indicating

38 The last sentence on indexed page 001-34 reads as follows: ‘This document sets out the proposed
Business Rescue Plan that may result in a better return for Affected parties as contemplated in section
128(1)(b) of the Act.’
39 Indexed page 001-142.
40 Oakdene (SCA) para 23.

33
the basis of his knowledge. In Oakdene Square Properties (Pty) Ltd and Others v Farm
Bothasfontein (Kyalami) (Pty) Ltd and Others, the court observed that:41
‘I have difficulty in understanding why a liquidator will be less successful in realising a proper
market value for the immovable property than a business rescue practitioner. Provided a sale
of the properties is effected at market -related prices, whether by private treaty or at an
execution sale, I can see no reason why a liquidator would not be equally successful in
obtaining the best price for the immovable property. Despite the negative connotations
surrounding liquidations, they are not per se negative, since they may, in certain cases, yield
a better financial return for creditors. No factual evidence was placed before me by the
applicants which justifies a different conclusion.’
I am in respectful agreement with this reasoning.

[109] Brand JA in Oakdene (SCA) stated that:42
‘My problem with the proposal that the business rescue practitioner, rather than the liquidator,
should sell the property as a whole, is that it offers no more than an alternative, informal kind
of winding -up of the company, outside the liquidation provisio ns of the 1973 Companies
Act which had, incidentally, been preserved, for the time being, by item 9 of sch 5 of the 2008
Act. I do not believe, however, that this could have been the intention of creating business
rescue as an institution. For instance, the mere savings on the costs of the winding-up process
in accordance with the existing liquidation provisions could hardly justify the separate
institution of business rescue. A fortiori, I do not believe that business rescue was intended to
achieve a wind ing-up of a company to avoid the consequences of liquidation proceedings,
which is what the appellants apparently seek to achieve.’
I am, again, in respectful agreement with this reasoning.

[110] While a so -called ‘forced sale’ may not achieve an optimal value for an

[110] While a so -called ‘forced sale’ may not achieve an optimal value for an
immovable property sold, there is no reason why a sale conducted by a liquidator
should be a forced sale . There is no obvious reason why a liquidator should not
achieve the same results as a business rescue practitioner might achieve.43


41 Oakdene Square Properties (Pty) Ltd and Others v Farm Bothasfontein (Kyalami) (Pty) Ltd and
Others 2012 (3) SA 273 (GSJ) (Oakdene (Gauteng)) para 49.1. Brand JA in Oakdene (SCA) para 34
shared the same difficulty identified by the court a quo.
42 Oakdene (SCA) para 33.
43 Propspec para 26.

34
[111] In preparing his plan, Dr Gribnitz chose to walk a fine, and difficult, line. Given
the defence to liquidation raised by the first respondent , namely that there had not
been compliance with s 45 of the Act, he appears not to have been prepared to
acknowledge that either Nedbank or the UIF were, in fact, creditors of the first
respondent, despite the enormity of their respective loans to the companies in the A1
Group. If he had accepted them as secured creditors , he would have had to
acknowledge that, by being by far the largest creditors of the first respondent , they
would have the ability to veto any proposed business rescue plan when it was
presented if they did not support its adoption . Both Nedbank and the UIF have
unequivocally expressed views in their affidavits in this application that this is what
they would do : they would not approve the Gribnitz plan if it was presented as the
formal business rescue plan.

[112] The only way to attempt to avoid this unhelpful scenario for the applicant, and
the first respondent, was for Dr Gribnitz to totally embrace the defence of the applicant
and the first respondent in denying the status of the first respondent’s two largest
creditors and their power to veto a business plan. This he did with seeming alacrity.
He stated the following:
‘There is a challenge in terms of the validity of the sureties, bonds, pledges and cessions that
were provided by the various entities of the group in terms of Section 45 of the Act. The validity
of Section 45 affects not only the securities provided to Nedbank by the subsidiaries but also
those provided to the UIF by the Company. The loans provided between the companies also
became void, as all the entities in the group failed to conclude the proper resolutions and
solvency and liquidity tests…’

[113] In amplification of this general proposition, Dr Gribnitz states that he
investigated the affairs of the first respondent to ensure that it complied with the

investigated the affairs of the first respondent to ensure that it complied with the
requirements to provide financial assistance. This, despite his earlier assertion that he
did not have time to verify anything. As regards the UIF’s claim, he indicates that:
‘… the claim is unenforceable for the following reasons:
(i) No proof could be found of any consideration having been given to the company’s
liquidity and solvency at the stage when the guarantee was accepted, the board resolution nor
special shareholder resolutions exist wherein the guarantee was approved.’

35
[114] As regards the Nedbank claim, identical wording was used.

[115] Dr Gribnitz does not appear to have critically assessed the merits of the first
respondent’s position and appears to have had no regard at all to the arguments of
Nedbank and the UIF. He does make mention of a legal opinion which he apparently
considered on this issue, and which was allegedly attached to the papers.44 But there
is no such opinion attached.

[116] In my view, p resentation of a plan such as the Gribnitz plan requires
impeccable objectivity.45 Such a plan is intended to guide the court to a just solution
for an existing problem. In simply adopting the applicant’s argument, it appears to me
that Dr Gribnitz compromised whatever objectivity he had and gives me further cause
to be critical both of his plan and his conclusions.

[117] The Gribnitz plan is a weighty document. In boxing terms, it is in the super
heavyweight category. It is 132 pages long and it is filled with tables and figures. On
the face of it, it is a n impressive -looking document. But it seems to me that the
numbers that fill its pages are limited by the quality of the data upon which they are
based, none of which is independently verified, and by the context within which the
numbers are employed. As Lord Steyn stated in his famous aphorism, ‘In law, context
is everything’.46

[118] Professor Wainer, an expert who has commented on the Gribnitz plan in an
affidavit delivered on behalf of the UIF, observed as follows:
‘In summary, although a lot of paper has been provided in the Plan, the Plan is remarkably
bereft of detail and basic information required to make reasonable assessment as to whether
the plan is realistic and credible, and better than a liquidation - and taking into account int er
alia, the extraordinary assumptions in the Plan and the vast insolvency referred to in the Plan.’



44 Allegedly attached and marked as ‘Appendix 9’ . Appendix 9 is, in fact, entitled ‘Methodology of

Investigation as Contemplated in Section 141 of the Companies Act’.
45 Kariba para 37.
46 R v Secretary of State for the Home Department, ex parte Daly [2001] UKHL 26; [2001] 3 All ER
433 (HL) para 28. Cited with approval in Aktiebolaget Häsle and Another v Triomed (Pty) Ltd 2003 (1)
SA 155 (SCA) para 1.

36
[119] In this, I share Professor Wainer’s views.

[120] However, while there is much to be critical about in the Gribnitz plan , and
much that is unclear from it, certain of Dr Gribnitz’s findings appear to me to be
unassailable:
(a) Dr Gribnitz stated that the current business operations of the first respondent
do not make a profit. That seems to me to be correct. He, however, does not state for
how long this has been the case.
(b) He stated, further, that:
‘The Company is under capitalised and requires an injection of capital to continue in business.’
The sourcing of capital is accordingly crucial to the continued longevity of the first
respondent. The importance of loan capital was acknowledged in Southern Palace
Investments 265 (Pty) Ltd v Midnight Storm Investments 386 Ltd , where the court
stated:47
‘If the company will be reliant on loan capital or other facilities, one would expect to be given
some concrete indication of the extent thereof and the basis or terms upon which it will be
available…’
There has been no such disclosure in the Gribnitz plan, nor can there be, for there is
no evidence of the first respondent acquiring any loan capital. The TUHF and Paragon
letters have already been considered and have been found to be wanting.
(c) Dr Gribnitz also disclosed that:
‘The Company is unable to pay its debts as they fall due and its operations need to be
restructured.’
An inability to pay debts as and when they fall due is a classic indication of commercial
insolvency.48
(d) Finally, in a possible nod to reality, Dr Gribnitz indicated that in the event that
the shareholder (a reference, I believe, to the UIF) and the Bank (which I assume to
be Nedbank):
‘… do not approve the turnaround plan and the practitioner fails to obtain funding from a third-
party, the properties will be sold, and the proceeds will be paid to the creditors as set out in
the approved business rescue plan.’

the approved business rescue plan.’

47 Southern Palace Investments 265 (Pty) Ltd v Midnight Storm Investments 386 Ltd 2012 (2) SA 423
(WCC) para 24.2.
48 Boschpoort Ondernemings (Pty) Ltd v Absa Bank Ltd [2013] ZASCA 173; 2014 (2) SA 518 (SCA)
(Boschpoort) para 16.

37
This seems to be what is envisioned by Dr Gribnitz for the reasons previously
mentioned.

[121] As was mentioned earlier, both Nedbank and the UIF hold the view that the
applicant, in bringing this application (and the other five business rescue applications),
is purposefully attempting to delay what they view as the inevitable liquidation of the
first respondent and the other companies targeted for liquidation. They point to the
history of the matter, previously mentioned in this judgment , in support of this
submission.

[122] A similar argument was advanced before Singh J in the business rescue
applications relating to Lococo 3, Lococo 4 and Old iStudy. Singh J made the following
observation in response to that argument:49
‘The intervening applicants went into great detail regarding why the BR applications have been
an abus e of the process of court and nothing more than a means to prevent the ultimate
winding up of the respondents. I am satisfied that even on EPH's own version the BR
applications were brought to prevent provisional orders of winding up being granted against
the respondents. There can be no bona fides in this. On that ground alone, the BR applications
fall to be dismissed.’

[123] The observations of Singh J in the matters that she dealt with coincide entirely
with mine in this matter. The applicant, naturally, denies that bringing the business
rescue application amounts to an abuse. In its replying affidavit, Mr Munsami states
the following:
‘The very purpose of business rescue is to prevent liquidation. It cannot therefore be an abuse
to invoke the remedy at the point when liquidation is imminent.’

[124] To my thinking , that is a telling statement, but it is at the same time an
inaccurate one. It is inaccurate in simply stating that the purpose behind a business
rescue application is to prevent liquidation. The purpose, expressed more accurately,
is to prevent liquidation in deserving cases. Not every business rescue application is

is to prevent liquidation in deserving cases. Not every business rescue application is
deserving and not every business rescue application is granted. But it is an accurate

49 Educor Property Holdings (Pty) Ltd v Lococo 3 (Pty) Ltd and Others (KwaZulu-Natal Division of the
High Court, Durban, unreported case no 2025-242163, dated 19 February 2025) para 122.

38
statement insofar as the imminence of liquidation is concerned. Even Mr Munsami
discerns its spectral presence.

[125] It appears to me that the entire dispute between the A1 Group and Nedbank
and the UIF has been carefully and impeccably choreographed by the A1 Group and
its advisors. The strategy employed to resist the ten liquidation applications is not at
odds with the recently much mentioned strategy in our law of the ‘Stalingrad defence’,
based upon the street -by-street defence strategy employed by the Red Army in the
Second World War when defending the city of Stalingrad during Operation
Barbarossa. That there is evidence of such a strategy in this matter, and in all of the
ten liquidation matters, brooks of no doubt.

[126] The initial defence s raised were the applications for discovery. Th ose
applications were taken all the way to the Constitutional Court, thus buying time. Then
there were applications for adjournments. The fallback position was business rescue
proceedings but not initially in respect of all the companies in the A1 Group. Only three
such applications were initially attempted because only three companies were affected
by the intervention application brought by the PIC and if intervention had then been
allowed, there was a very real prospect that provisional orders of liquidation may have
followed, given that such relief was specifically claimed in the event of the intervention
applications succeeding. If that had occurred , the survival of the A1 Group house of
cards would have been put at risk. When, finally, the stage was set for the provisional
orders of liquidation to be heard, business rescue proceedings were then conjured up
in respect of the next seven companies.

[127] None of this happened simply by chance. It happened by design and the
design was intended to frustrate Nedbank and the UIF in their intentions to seek the
liquidation of the ten companies. Mr Harpur, with a strong, but totally unjustified, sense

liquidation of the ten companies. Mr Harpur, with a strong, but totally unjustified, sense
of outrage, has repeatedly aggressively argued that it is defamatory of Nedbank and
the UIF to suggest that a Stalingrad strategy has been adopted by the applicant. How
that allegation could be defamatory is not entirely clear to me. But perhaps it is.

[128] Mr Harpur argued further that it would have been improper for this application,
and the other business rescue applications, to have been brought earlier. With the

39
greatest of respect, that argument is a weak one and it fails to persuade, because the
applicant, as already mentioned, has put up no original documentation to demonstrate
its true financial history and its present financial condition. It appeared to be submitted
by the applicant that the financial condition of the first respondent gradually worsened
to the position where business rescue proceedings became imperative. No attempt
was made to explain how all six of the companies sought to be placed under business
rescue reached the same critical position at the identical moment in time. Indeed, the
applicant directly contradicts itself on the issue of the necessity for business rescue
when it states at paragraph 40 of its founding affidavit that:
‘The launching of this business rescue application is not the result of delay or avoidance. It
has not been delayed for tactical purposes. The application is brought appropriately at this
time due to:
40.1 the result of a combination of material considerations including complex litigation
previously launched across multiple jurisdictions
40.2 negotiations with creditors and institutional shareholders, and
40.3 recent stabilisation in operational performance of the company.’ (Underlining added.)

[129] The contradiction that arises from this statement is the wording to be found in
paragraph 31 of the same founding affidavit:
‘The financial distress precipitated in the first place by the C ovid-19 pandemic, has recently
increased in intensity by virtue of the said liquidation applications …’
The underlined statement in the preceding paragraph and the statement in this
paragraph both cannot be correct.

[130] As mentioned earlier in this judgment, business rescue proceedings are
required to be brought with expedition. That has clearly not occurred in this instance.
The applicant has delayed for months, perhaps even years, in moving this application
since the launching of the ten liquidation applications. The business rescue

since the launching of the ten liquidation applications. The business rescue
applications have been deployed only when other applications, introduced in order to
delay the advancement of the ten liquidation applications , have borne no fruit. The
production of financial statements, or even management accounts, would have borne
out when the clamant need for business rescue protection , now proclaimed as being
essential and deserving, first arose. The first mentioned documents do not exist for an

40
unexplained reason and while the second mentioned documents apparently do exist,
they have been kept from this court.

[131] In Van Staden NO and Others v Pro-Wiz Group (Pty) Ltd ,50 the court
unanimously stated that:
‘All of that constituted an abuse of the process of the court and an abuse of the business
rescue procedure. It has repeatedly been stressed that business rescue exists for the sake of
rehabilitating companies that have fallen on hard times but are capable of being restored to
profitability or, if that is impossible, to be employed where it will lead to creditors receiving an
enhanced dividend. Its use to delay a winding -up, or to afford an opportunity to those who
were behind its business operations not to account for their stewardship, should not be
permitted. When a court is confronted with a case where it is satisfied that the purpose behind
a business rescue application was not to achieve either of these goals, a punitive costs order
is appropriate.’

[132] Those words are equally of application to the facts of this matter.

But in any event …
[133] There is , in any event , a significant difficulty , not yet mentioned , that the
applicant would face even if the Gribnitz plan was capable of being accepted.

[134] The Gribnitz plan is founded on the movement of immovable properties from
the property owning companies to the first respondent. I have already mentioned the
financial difficulties that exist in implementing the transfer of those properties. There
is also a legal difficulty.

[135] All of the immovable properties intended to be acquired by the first respondent
from the property owning companies are bonded to Nedbank as security for the loans
taken by the companies that own them. Nedbank argues that s 134(3) of the Act finds
application to the facts of this matter and that, it says, is the end of the matter and the
end of the Gribnitz plan.


50 Van Staden NO and Others v Pro-Wiz Group (Pty) Ltd [2019] ZASCA 7; 2019 (4) SA 532 (SCA) (Pro-

Wiz) para 22.

41
[136] Section 134(3) of the Act reads as follows:
‘If, during a company’s business rescue proceedings, the company wishes to dispose of any
property over which another person has any security or title interest, the company must-
(a) obtain the prior consent of that other person, unless the proceeds of the disposal
would be sufficient to fully discharge the indebtedness protected by that person’s
security or title interest; and
(b) promptly-
(i) pay to that other person the sale proceeds attributable to that property up to
the amount of the company’s indebtedness to that other person; or
(ii) provide security for the amount of those proceeds, to the reasonable
satisfaction of that other person.’

[137] Thus, if a company in business rescue wishes to dispose of property which
has been put up as security, then it may do so if the security holder consents to the
disposal, or the proceeds of the sale would discharge the secured debt, and the
security holder is promptly paid the full amount of the secured debt.51

[138] It is not in dispute that Nedbank does, indeed, hold mortgage bonds over all
the immovable properties owned by the property owning companies , although the
applicant argues that they are void by virtue of the alleged non -compliance with s 45
of the Act. But the physical existence of the mortgage bonds is conceded. All of those
bonds are covering bonds and cover the indebtedness of the company passing them
in respect of any future indebtedness from whatsoever cause arising. In order for the
property owning companies to transfer them to the first respondent, the consent of
Nedbank is required ,52 which, according to the deponent to Nedbank’s answering
affidavit, will not be given by Nedbank.

[139] Section 134 of the Act does, however, offer a work around to such an impasse:
provided the proceeds of the disposal fully discharge the indebtedness owed to the
holder of the security and the holder is promptly paid all that is owed to it from the

holder of the security and the holder is promptly paid all that is owed to it from the
proceeds of the disposal, the consent of the holder of the security need not be first
obtained.

51 Louis Pasteur Holdings (Pty) Ltd and Others v Absa Bank Ltd and Others [2018] ZASCA 163; 2019
(3) SA 97 (SCA) paras 22-23.
52 Energydrive Systems (Pty) Ltd v Tin Can Man (Pty) Ltd and Others 2017 (3) SA 539 (GJ) para 19.

42
[140] There is no prospect of this occurring because:
(a) The Gribnitz plan requires the immovable propert ies to be offered to, and
acquired by, the first respondent at 75 percent of their true value . It appears unlikely
that this will be sufficient to fully discharge all amounts owing to Nedbank; and
(b) There is no likelihood of Nedbank being promptly paid what is owed to i t. Dr
Gribnitz proposes that Nedbank would be paid what is owed to it in instalments over
a period of ten years.

[141] Nedbank’s stated intention to refuse to approve this scheme and to refuse to
allow the acquisition of the immovable properties by the first respondent is accordingly
entirely understandable and is not, in my view, unreasonable and must be considered,
for, as was stated in Oakdene (SCA):53
‘As I see it, the applicant for business rescue is bound to establish reasonable grounds for the
prospect of rescuing the company. If the majority creditors declare that they will oppose any
business rescue scheme based on those grounds, I see no reason wh y that proclaimed
opposition should be ignored. Unless, of course, that attitude can be said to be unreasonable
or mala fide.’

[142] Why should Nedbank permit its security to be realised , then be sold, but not
be allowed to participate in the proceeds of that sale, and then be required to wait for
ten years before being fully repaid ? The proposition simply has to be stated to be
rejected. As Olsen J remarked, in a similar vein, in JVJ Logistics (Pty) Ltd v Standard
Bank of South Africa Ltd and Others:54
‘The business plan postulates the first respondent capitalising the company and for the
achievement of that purpose being kept out of its lawful entitlement to possession of its
property for over three years. The plan did not propose merely to compromise th e first
respondent's existing claim as a creditor, but sought to compel the first respondent to fund the

company, and against its will to submit to a regime of risks, and infringements of its own future
rights represented by its proprietary interest in the vehicle. I cannot discern any basis upon
which a court could burden the first respondent with these obligations against its will by
declaring its vote 'inappropriate', and in effect thereby giving the plan the requisite approval.’


53 Oakdene (SCA) para 38.
54 JVJ Logistics (Pty) Ltd v Standard Bank of South Africa Ltd and Others 2016 (6) SA 448 (KZD) para
57.

43
[143] The reality of s 134(3), and the expressed attitude of Nedbank, will accordingly
prevent the Gribnitz plan , or any other plan that involves the transfer of immovable
properties from the property owning companies, from being implemented.

[144] The applicant attempts to overcome this apparently insurmountable obstacle
by arguing that , by virtue of the alleged non -compliance by the directors of t he
companies constituting the A1 Group, including the directors of the first respondent,
with the provisions of s 45 of the Act, the loan agreements concluded by each of those
companies with Nedbank (and the UIF) are void ab initio. It is further submitted that
because of this, the mortgage bonds are also void. There is, thus, on this argument,
no security held by Nedbank and consequently the provisions of s 134(3) of the Act
are irrelevant.

[145] I do not accept the correctness of this proposition. In Bay Loan Investment
(Pty) Ltd v Bay View (Pty) Ltd,55 Van Winsen J held that a:
‘… Court would not readily hold that a registered mortgage bond, regular on the face of it, was
in fact a nullity. To do so in the absence, inter alia, of fraud or error could lead to greater
inconvenience or impropriety than to allow it to retain its validity.’

[146] There is no suggestion of fraud or error in this instance.

[147] While it is so that a mortgage bond is always accessory to an obligation, that
does not necessarily mean that a principal obligation must exist before a mortgage
bond is concluded, for it may be given as security for a future debt or as a covering
bond.56 And if the obligation that underpinned the granting of the mortgage bond is
found to be void, as the applicant urges this court to find in raising the s 45 defence, it
does not mean that there is no obligation secured by the mortgage bond.57

[148] The mortgage bonds were passed to provide Nedbank with additional security
for the amount in excess of R800 million that it loaned to the A1 Group. The mortgage

for the amount in excess of R800 million that it loaned to the A1 Group. The mortgage

55 Bay Loan Investment (Pty) Ltd v Bay View (Pty) Ltd 1972 (2) SA 313 (C) at 315H-316A.
56 Panamo Properties 103 (Pty) Ltd v Land and Agricultural Development Bank of South Africa [2015]
ZASCA 70; 2016 (1) SA 202 (SCA) (Panamo) paras 24 and 25.
57 Panamo para 29.

44
bonds are all covering bonds. As Gorven AJA (as he then was) stated in Panamo:58
‘A covering bond may provide security for more than one specific debt. The bond may
therefore afford security for more than obligations arising under the loan. It is not necessarily
extinguished merely because the loan is void. It complies with the formalities required by s 51
of the Deeds Registry Act for those covering future indebtedness. The nature of the bond thus
does not exclude the possibility that an enrichment claim may be covered.’ (Footnotes
omitted.)

[149] Even if the loans are found to be void, there is a very strong likelihood of an
enrichment claim being brought by Nedbank and the UIF. I am , accordingly, not
prepared to find that the mortgage bonds are void.

Conclusion
[150] The Gribnitz plan, despite its length, remains unpersuasive that the aims of
business rescue can be achieved. In other words, it does not say what Mr Munsami
says it says and there is no reasonable prospect of the first respondent being saved.

[151] Mr Wasserman accurately summed up the position in his heads of argument,
where he stated that the applicant’s:59
‘… business rescue application is devoid of substance. It advances no coherent or funded
plan capable of restoring solvency to the second respondent. The proposal relies on vague
assertions of future restructuring, speculative forecasts, and lacks verifiab le financial
information, binding commitments, or independent validation.’
I am fully in agreement with that statement.

[152] As was stated in Oakdene (Gauteng):60
‘In my view, the interests of the creditors, as opposed to that of the company , should carry
more weight in the circumstances of this case. There is no “business” of the company to be
rescued.’



58 Panamo para 31.
59 While the extract quoted refers to the second respondent, the reference is, nonetheless, a reference
to the first respondent.
60 Oakdene (Gauteng) para 49.7.

45
[153] Furthermore, as was also stated in Oakdene (Gauteng):61
‘Having regard to the provisions of ss 128 to 154 of the Act, once a company is placed under
supervision and business rescue proceedings have commenced, such proceedings are open-
ended, and could probably include further applications to court, and carry on for a considerable
period of time. This would be even more so if there are parties involved who are seeking to
obstruct the creditors of the relevant company, as the applicants have been accused of doing.
These conditions will make the task of a business practitioner who has to seek the cooperation
of the directors, management and creditors extremely difficult.’ (Footnotes omitted.)
Given that I have found such obstruction to exist in this matter, the words narrated
above find application.

[154] It seems to me that no proper case for supervision and business rescue has
been made out. The application must accordingly be dismissed with costs.

Costs
[155] This was a complicated and lengthy matter and justified, in my view, the
employment of two counsel. In the exercise of my discretion, I make no order of costs
against FCMB, Infinity, Siyaya and RSA Boss, who must each bear their own costs.

[156] Regard being had to the views of Wallis JA expressed in Pro-Wiz, I am of the
view that an order of costs on the attorney and client scale against the applicant is
justified, given the facts of this matter.62

[157] I turn now to consider the counter -applications for liquidation brought by
Nedbank and the UIF.

The liquidation counter-application
Introduction
[158] Section 131(4)(b) of the Act , in what can only be described as a discordant
use of grammar, states the following:
‘After considering an application in terms of subsection (1), the court may-
(a) …

61 Oakdene (Gauteng) para 49.6.
62 Pro-Wiz para 22. See also Cape Point Vineyards para 7.

46
(b) dismissing the application, together with any further necessary and appropriate order,
including an order placing the company under liquidation.’

The case for liquidation
[159] Much of the evidence on this topic derives , ironically, from the Gribnitz plan
itself.

[160] In the Gribnitz plan, the author acknowledges the dire financial circumstances
in which the first respondent is presently trapped. As previously mentioned, he has
indicated that the first respondent is unable to pay its debts as and when they fall due,
and he accepts that the first respondent requires an injection of capital to be able to
continue in existence . In other words, without such capital injection, the first
respondent has no ability to sustain itself . There is , however, no indication of any
capital being forthcoming.

[161] Dr Gribnitz, further, and critically, states that:
‘The company’s liabilities currently exceed its assets to the value of R373 647 877,44 as set
out in the trial balance dated 30 June 2024.’

[162] That statement unequivocally establishes factual insolvency63 (as previously
mentioned, commercial insolvency has already been established. ) The trial balance
referred to in that extract is already more than 18 months out of date and, as with the
other financial documentation apparently seen by Dr Gribnitz, has not been put up as
an annexure to the founding papers. There is, accordingly, every possibility that the
amount by which the first respondent’s assets are exceeded by its liabilities has
increased since the trial balance was performed.

[163] Dr Gribnitz makes the further observation that the first respondent:
‘… cannot be rehabilitated in the conventional sense through restructuring of its own income
streams.’

[164] Adding to the picture of abject financial helplessness:

63 Boschpoort para 16.

47
(a) Nedbank states that it has not received any payments from the first
respondent for several years. That has not been challenged by the first respondent;
(b) It is also unchallenged by the first respondent that Nedbank served a letter of
demand on it in terms of s 345 of the Old Companies Act and that it failed to pay or
compound the amount demanded to the reasonable satisfaction of Nedbank.

[165] All of these facts create the vision that the first respondent is no longer simply
financially distressed but now finds itself beyond the event horizon in the black hole of
factual insolvency, from which nothing can escape.

[166] The applicant, nonetheless, attempts to defeat the pull of factual insolvency
by raising noncompliance with s 45 of the Act as its answer to Nedbank’s and the UIF’s
case that the first respondent be wound up. I consider that issue now.

Section 45 of the Act
[167] Section 45(3) of the Act states that:
‘Despite any provision of a company’s Memorandum of Incorporation to the contrary, the board
may not authorise any financial assistance contemplated in subsection (2), unless-
(a) the particular provision of financial assistance is-
(i) pursuant to an employee share scheme that satisfies the requirements of
section 97; or
(ii) pursuant to a special resolution of the shareholders, adopted within the
previous two years, which approved such assistance either for the specific
recipient, or generally for a category of potential recipients, and the specific
recipient falls within that category; and
(b) the board is satisfied that -
(i) immediately after providing the financial assistance, the company would
satisfy the solvency and liquidity test; and
(ii) the terms under which the financial assistance is proposed to be given are
fair and reasonable to the company.’

[168] The applicant initially contended that there had been non-compliance with s 45
of the Act when it stated that:

48
‘There was no such Section 45 compliance, as is the subject of extensive dispute on the
pending winding up application against the First Respondent, which requires reference and
application here in.'

[169] There is, however, evidence of compliance with the requirements of s 45. As
Nedbank states in its replying affidavit in its counter application for liquidation:
‘In response to ULI Holdings having disputed compliance with section 45, Nedbank adduced
the resolutions evidencing due compliance with section 45, and UL I Holdings was afforded
the opportunity to deal there with in a further answering affidavit.’

[170] Likewise, the UIF put up copies of documents signed by the directors of the
first respondent as annexures to its answering affidavit that, on the face of them, also
demonstrated compliance with s 45. Faced with this, Mr Munsami was compelled to
alter his stance and accordingly stated the following in his answering affidavit to the
UIF’s application:
‘[23] … I have conducted a search of the First Respondent’s and Applicant’s records and
have ascertained that there were in fact section 45 documents produced by the respondents
for signature, as this was a requirement for validity of the transactions in question.
[24] At one level, this proves as correct that the Applicant and First Respondent’s point
that section 45 compliance was required.
[25] However, at another level it involves a further inquiry as regards what was produced
for that compliance and signed complied (sic) with the statutory requisites.
[26] In fact, there was no such compliance because the director s simply signed the
document that had been forwarded to them either UIF/P IC in the apparent belief that
everything was in order and that the UIF/P IC, who were fully alive to the financial position of
the First Respondent and Homii would have checked this for compliance in the first place
[27] The directors accordingly never applied their minds to the proper test for the solvency

[27] The directors accordingly never applied their minds to the proper test for the solvency
and liquidity requirements, which was to assess the financial position as if the guarantees had
been called up. This follows from the use of the works in the statute ‘immediately after’ in
section 45.’

[171] Mr Munsami does not state how many directors there were at the critical
moment, or who the directors were at the time who did not apply their mind s to the
issue of s 45. Nor does he explain what entitlement he has to make submissions on
behalf of the unnamed directors . In stating that no consideration was given to the

49
provisions of s 45 , he can, at best, only speak for himself. Whether he did as is
described in the extract above is, however, of no real consequence. Section 45 does
not deal with the views of a single director: it requires the board of directors of a
company to hold a certain view. There is no compelling evidence that any of the other
unidentified directors held the view that Mr Munsami now professes prevailed at the
time that the loans were being considered.

[172] Even if that conclusion should be incorrect, it is not difficult to discern that the
version now advanced by the applicant concerning this issue has changed. It was
initially based upon the allegation that there had been non-compliance with s 45 but
has now transformed itself into a defence that , while there appeared to have been
compliance with s 45, there was, in truth, no proper compliance. This directly
contradicts Dr Gribnitz’s previously mentioned assertion that there were no board
resolutions nor special shareholder resolutions.64

[173] To establish that there was no proper compliance with s 45, the applicant does
not ask the other directors of the first respondent in office at the time of the conclusion
of the loans to comment under oath on what they did and what they believed at that
time. Instead, the applicant has turne d to a firm of chartered account ants, GG
Chartered Accountants (the accountants), for assistance.

[174] The accountants were requested to comment upon an agreed -upon
procedure proposed by the management of the first respondent. That assignment was
accepted, and the accountants generated a report, which was dated 7 March 2025.

[175] In that report, the accountants make the following opening comment:
‘We have performed the procedure enumerated below with respect to the solvency and
liquidity position of Urban Lifestyle Investment Holdings (Pty) Ltd. Our engagement was
undertaken in accordance with the International Standard on Related Services 4400 (Revised)

undertaken in accordance with the International Standard on Related Services 4400 (Revised)
applicable to agreed-upon procedures engagements. The procedures were performed solely
to assist Urban Lifestyle Investment Holdings (Pty) Ltd to determine the validity and accuracy
of the solvency and liquidity test in terms of S45 of the Companies Act of South Africa prepared
by management on 06 March 2025 for the purpose of providing financial assistance.’

64 See paragraph 111 of this judgment.

50
[176] The accountants reported their findings as follows:
‘1. We have obtained the balance sheet a nd solvency and liquidity test, prepared by
management for the periods 28 February 2019, 31 March 2 019, 29 February 2020 and 31
March 2020.
2. We reperformed selected c asts and cross c asts and confirmed the mathematical
accuracy of the balance sheet and the solvency and liquidity test calculations.
3. We reperformed the solvency and liquidity test as per the requirements of the
Companies Act of South Africa and compared to the test results produced by management.
4. We presented discrepancies based on our findings.’

[177] The accountants conclude their report with the following statement:
‘As this is not an audit or a review engagement, we do not express any assurance opinions
on the information provided and work performed.’

[178] The ISRS 4400 (Revised) document, referred to in the accountant’s report,
states the following on an agreed-upon procedure:65
‘In an agreed -upon procedures engagement, the practitioner performs the procedures that
have been agreed upon by the practitioner and the engaging party, where the engaging party
has acknowledged that the procedures performed are appropriate for the purpose of the
engagement. The practitioner communicates the agreed-upon procedures performed and the
related findings in the agreed-upon procedures report. The engaging party and other intended
users consider for themselves the agreed -upon procedures and finding s reported by the
practitioner and draw their own conclusions from the work performed by the practitioner.’

[179] What this appears to mean is that no investigative work was performed by the
accountants: they simply performed a mathematical exercise to determine the
accuracy of what had been presented to them . The details of that exercise are not
mentioned in any detail.

[180] It appears to me that no real value can be extracted from this exercise. It is an

[180] It appears to me that no real value can be extracted from this exercise. It is an
attempt by the management of the first respondent to go back in time to 2019 and to
determine the state of mind of a collection of unidentified directors. The efforts of the
accountants are entirely dependent upon the information that they were given by

65 International Auditing and Assurance Standards Board ISRS 4400 (Revised), Final Pronouncement
April 2020, para 4.

51
management. What that information was is not disclosed and neither are the balance
sheets and the solvency and liquidity tests that were presented to them to enable them
to do what the management of the first respondent wanted them to do. The woeful
financial records kept by the first respondent have already been addressed in this
judgment and do not inspire any form of confidence. The accountants further comment
that they ascertained discrepancies, but they do not disclose what those discrepancies
were.

[181] It seems to me that the defence predicated on s 45 of the Act has consequently
not been established.

Conclusion
[182] I am not satisfied that there is any merit in the s 45 defence. Mr Harpur has
labelled it as an ‘extensive dispute’. I do not see it that way. It appears to me to be a
last resort to escape liquidation. There is objective evidence that there was compliance
with the prerequisites of s 45 of the Act and there is overwhelming evidence that the
first respondent is both factually and commercially insolvent. Dr Gribnitz , in fact,
perhaps not realising that he did so, states this to be the case.

[183] The first respondent has no ability to trade profitably, has no access to capital,
and, as this judgment has found, has no entitlement to be placed in business rescue.
In addition, if transfer of the immovable properties somehow occurs, whatever income
may be generated through the immovable properties will not accrue for the benefit of
the first respondent because of the cessions of income in favour of Nedbank. That
income will therefore not be available as working capital to help keep the first
respondent afloat.

[184] The first respondent is in a hopeless financial position . It appears to me that
in such circumstances, an order of liquidation is not only justified but is also necessary.
Section 1 31(4)(b) of the Act expressly permits such an order to be granted. The
formalities required by law have been met and the first respondent has acknowledged

formalities required by law have been met and the first respondent has acknowledged
under oath that it has no employees.

52
[185] I am, in the circumstances, of the view that the counter -applications must
succeed and that a provisional order of liquidation must issue.

Costs
[186] The costs order that must now follow shall be costs in the liquidation and shall
include the costs of two counsel where so employed by Nedbank and the UIF and they
shall be payable on the attorney and client scale for the reasons advanced when
dismissing the business rescue application.

Order
[187] I accordingly grant the following order:
1. The application to place the first respondent under supervision and to
commence business rescue proceedings is dismissed with costs . As regards the
payment of those costs:
(a) The costs of the affected parties, Nedbank Limited and the Unemployment
Insurance Fund, shall be paid by the applicant on the attorney and client scale and
shall include the costs of two counsel where so employed; and
(b) The affected party, RSA Boss Protection (Pty) Ltd, shall pay its own costs.
2. The counter-applications brought by the affected parties, Nedbank Limited and
the Unemployment Insurance Fund , are granted and a rule nisi issues , calling upon
the first respondent, and any other interested party, to show cause to this court on 24
April 2026 at 09h30, or so soon thereafter as counsel may be heard, why the first
respondent should not be finally wound-up.
3. This order shall operate as an order provisionally winding -up the first
respondent with immediate effect.
4. A copy of this order shall be published on or before 10 April 2026, once in the
Government Gazette and once in a newspaper published in Durban and circulating in
KwaZulu-Natal.
5. The costs of the liquidation application shall be costs in the winding -up and
the costs of Nedbank Limited and the Unemployment Insurance Fund shall be paid on
the attorney and client scale and shall include the costs of two counsel where so
employed.
6. Identical orders shall simultaneously issue, mutatis mutandis, in the following
matters:

53
(a) Case number 2025-120714: Homii Lifestyle (Pty) Ltd v K2017659127 (SA)
(Pty) Ltd.
(b) Case number 2025-120725: Homii Lifestyle (Pty) Ltd v K2017659651 (SA)
(Pty) Ltd;
(c) Case number 2025-120731: Homii Lifestyle (Pty) Ltd v K2018043790 (SA)
(Pty) Ltd;
(d) Case number 2025-120738: Homii Lifestyle (Pty) Ltd v Umbulumko
Knowledge Services (Pty) Ltd; and
(e) Case number 2025-120747: A1 Capital (Pty) Ltd v Uli Props (Pty) Ltd.
MOSSOP J

54
APPEARANCES


Counsel for the applicant: Mr G D Harpur SC with Mr A Gevers

Instructed by: RW Attorneys
Walker Creek Office Park
2nd Floor, Walker Creek 2
90 Florence Ribeiro Avenue
Muckleneuk
Pretoria

Locally represented by:

Raneshan Naidoo Associates
2 Oliver Place
Bulwer
Glenwood
Durban

Attorneys for the first respondent: Norell Myers and Associates
300 Marine Drive
Bluff

Counsel for the affected party, Mr P T Rood SC with Mr C Bester
Nedbank Limited:

Instructed by: Lowndes Dlamini Incorporated
56 Wierda Road East (corner
Albertyn Ave)
Wierda Valley
Sandton

55
Locally represented by:

Venns Attorneys
Suite 12, Lakeside Building
Derby Downs Office Park
University Road, Westville
Durban

Counsel for the affected party, Mr J Wassenaar SC with Mr M Msomi
The Unemployment Insurance Fund:

Instructed by: Tshisevhe Attorneys Incorporated
Building 5
1st Floor
Inanda Greens
54 Wierda Road
Sandton

Locally represented by:

Srish Partab Incorporated Attorneys
Block B, Suite 7B
21 Cascades Crescent
Chase Valley
Pietermaritzburg

Counsel for the affected party, Ms C J Moodley
Infinity Group SA (Pty) Limited

Instructed by: Shenaaz B Habib and Company
311 Lenny Naidoo Drive
Bayview
Chatsworth

56
Counsel for the affected party, Ms S Ameer
Siyaya Project Management (Pty) Ltd

Instructed by: Anand Nepaul
9th Floor, Royal Towers
30 Dorothy Nyembe Street
Durban

Counsel for the affected party: Mr S Mthalane
RSA Boss Protection

Instructed by: Miten Naran Incorporated
Suite 9
Raza Oriental Plaza
59 Pandora Street
Phoenix