IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
In the matter between:
FIRST RAND BANK LIMITED
and
KHUMONETIX PROPRIETARY LIMITED
Not Reportable
Case no: 7114/2024
APPLICANT
RESPONDENT
Neutral Citation: First Rand Limited v Khumonetics (Pty) Ltd (7114/2024)
[2026] ZAFSCH 280 (7 May 2026)
Coram: MOLITSOANE J
Heard: 06 March 2025
Delivered: 7 May 2026
Summary: Company law - final winding up - whether the respondent is unable
to pay its debts as contemplated ins 344(0 read withs 345 of the Companies Act
61 of 1973.
2
ORDER
1 The respondent company is hereby placed in final liquidation.
2 The costs of application, including the costs of two counsel on scale C,
shall be the costs in the winding up of the respondent.
JUDGMENT
Molitsoane J
[l] This is an extended date for the rules nisi to make final an order in tenns of
which the applicant, Rand Merchant Bank (RMB), was granted relief placing the
respondent, Khumonetix Propriety Ltd (Khumonetix), under provisional
liquidation in the hands of the Master of the High Court. RMB has complied with
the terms of the provisional order. The dispute is pmsuant to the monies lent and
advanced by RMB to Khumonetix in tenns of two written credit facilities, titled
'Facilities "B" and "G"' respectively.
[2] In order to establish its locus standi, RMB avers that it is a creditor of
Khumonetix pursuant to monies lent and advanced by it to the latter and in terms
of two credit facilities. Firstly, there is an agreement titled 'Facility B and C
Agreement' (facility B1), concluded between the patties on or about 29 June 2018
and amended in tenns of addenda dated 4 December 2018,30 September 2021
and I December 2022. Another addendum between the parties in respect of this
credit facility was concluded on the same day, I December 2022, which RMB
1 Rand Merchant Bank and Khumonct ix. are parties to Facility B Agreement.
3
contends Khumonetix had breached. An amount of R534 650 000 was made
available to Khumonetix in terms of this facility while Rl 15 000.00 was made
available for facility C. The final repayment date for facility B was 31 July 2024.
Facility Chas apparently been repaid and plays no role in these proceedings.
[3] Secondly, there is another agreement titled 'Facility G Agreement' 2
(facility G) concluded on 30 September 2021 between the RMB and Khumonetix
and other Obligors3. This agreement was amended in tenns of the addenda dated
27 October 2021 and 1 December 2022 respectively. In tenns of facility G, RMB
granted a loan facility in the capital sum of Rl 135 782 398.00 to Khumonetix.
The final repayment date of this loan agreement was 30 November 2025.
Recalibration between facilities B and G
[ 4] The December addendum provided for the recalibration between facility
Band G to take place when a prepayment was made by Khumonetix to RMB. In
the founding affidavit, it is stated as follows:
'The December Addendum provides that, following the sale of a property comprising the
Secured Portfolio,(i) proceeds in respect thereof shall be applied as a prepayment of facility B
and (ii)immediately thereafter, the recalibra tion formula shall be applied for the purposes of
deriving an appropriate allocation of the overall debt quantum between facility B and facility
G. Depending on the result, an amount would either:
1. be lent or advanced under facility B and applied by the applicant ( on the
respondent's behalf) as a repayment of the amount outstanding under Facility G
(thereby resulting in an increase of facility B outstanding and a reduction in the
facility G outstandings;) or
11. be lent or advanced under facility G and applied by the applicant on the respondents
behalf as a repayment of the amount outstanding under facility B (thereby resulting
in an increase of facility G outstanding and a reduction in facility B outstanding) .
in an increase of facility G outstanding and a reduction in facility B outstanding) .
2 Rand Merchant Bank, Khumoneti,c, Fourways rrecinct rropriety Ltd and The Michael Family Trust are parties
to the Facility G Agreement.
3 Obliger refers to a person who bin_ds him- or herself contractually to perform some obligation .
4
iii. In or about May 2023 the applicant received the proceeds in tenns of the Abbeydale
Sale Agreements (Abbeydale Proceeds)) and in accordance with the contractual
arrangements set out in the December Addendum.
iv. The Abbeydale proceeds in an amount ofR 629 398 975.11 were applied as a repayment
reduction of facility B outstanding.
v. Immediately thereafter and pursuant to the recalibration exercise it was determined that
an amount of R 475 744 556 .17 should be readvanced under facility B resulting in
an increase of the amount outstanding thereunder an applied by the applicant on the
respondents behalf as a repayment reduction of the facility G outstandings.'
[5] It is the case of RMB that, notwithstanding this recalibration following the
Abbeydale proceeds, Khumonetix remained indebted to RMA and further failed
to repay by the date agreed and despite the demand, remained in breach of its
contractual obligations.
[6] It is further the case of RMB that Khumonetix defaulted on facility G. It
relies on a number of events in proof of allegations of breach of the tenns and
default of the facility. Clause 21.3.13 of facility G states as follows on cross
default events:
'An event of default shall occur if any financial institution including the lender in its capacity
as lender to the Borrower and or any of the Material Parties requires the early repayment of
any loan agreement or agreements including but not limited to any of the Structure Facility
Agreements following a breach thereof by the borrower or the applicable Material Party and/or
exercises any security rights against the Borrower or the applicable Material Party and such
breach is not remedied within a period of 20 business days.'
[7] The first event relates to the loan to F ourways Precinct Propriety Ltd
(FWP). FWP is a material party as defined in facility G and referred to in clause
21.2.13 above. RMB and Investec Bank Ltd (Investec), as lenders, advanced a
21.2.13 above. RMB and Investec Bank Ltd (Investec), as lenders, advanced a
loan to FWP in terms of the Facility Agreement (Fourways Precinct and
Amended and Restated Facility Agreement) during or about August 2015. RMB
5
and Investec accelerated the payment of the outstanding balance owed by FWP.
In the letter of acceleration, a demand was also made on behalf of RMB and
Investec demanding settlement of outstanding balance due to RMB and Investec.
FWP did not adhere to the demand.
[8] The second event relates to Michael Family Trust (MFT). It is also included
in the definition of material parties in tenns of the facility G agreement. RMB
and Investec advanced a bridging loan to MTF. The money owing in terms of this
loan was due by 30 November 2024. RMB and Investec accelerated the payment
of the full outstanding balance owed by MFT also in respect of this loan
agreement. The acceleration of the outstanding balances constituted breach of
clause 21.2.13 of facility G.
[9] It is imp011ant to note that the breach of the FWP facility agreement and
MFT loan agreement arose directly from breaches by Azrapart Propriety ~td
(Azrapart) of the Amended and Restated Facility Agreement dated 12 August
2022 concluded between RMB, Investec and Azrapart. In his explanatory
affidavit, the deponent in opposition of this application explains that RMB and
Investec are involved in litigation with the companies of which he is a director,
trnstee or hold and interest in, including Azrapart.4
[1 OJ A number of these entities, including Azrapart, are interwoven in
agreements involving RMB and Investec on the one hand and the entities on the
other. The breach of Azrapart arises on its alleged failure to pay the amount
demanded by letter dated 10 July 2024 by RMB. The case for RMB is that
Azrapaii breached the interest cover ratio as set out in the letter of demand sent
4 The entities include Michael Family Trust, Azrapaii Proprietary Ltd, Macrospace Trading Proprietary Limited,
Fourways Precinct {Ply) Ltd,
Loch Logan Waterfront (Ply) Ltd and Karmel Trust.
6
to it. Azrapait was involved in the business rescue application in this court before
Loubser J. On 27 March 2025, Loubser J handed down a provisional judgment in
which he held, inter alia, that it was common cause between the parties that the
total outstanding amount due by Azrapat1 to RMB and Investec was R2.3 billion,
and as Azrapa1t was unable to pay its debt.
[ 11] The third event of default is premised on clause 21.2.4 of the facility G
agreement which provides that an 'event of default shall occur if the Borrower
fails to comply with any of the Financial Covenants and such breach is not
rectified within 30(thitty) days after receipt of written notice from the lender
calling upon the borrower to do.' It is the case of RMB that on 15 August 2024,
a letter was addressed to Khumonetix in tenns of which it was notified of the
breach of the interest cover ratio and was required to remedy the breach within
30 days. On the version of RMB, Khumonetix failed to rectify the breach.
[ 12] The third event of default is based on the alleged failure to comply with the
undertakings as stipulated in clause 21.2.12 which provides that 'an event of
default shall occur if any Obligor breaches any of its obligations in te1ms of and/
or undertakings given under any of the Finance Documents and failed to remedy
such breach within 5(five) business days after receipt of written notice from the
Lender calling upon the Bonower to do so.'
[13] The last event of default relates to the so-called 'material adverse event and
tennination of material lease. In tenns of the facility G agreement, material term
leases included the list of ce1iain prope1ties as well as the controlling body of a
certain sectional title scheme known as Waterclub Body Corporate (Waterclub)
in respect of the Radisson lease agreement. Radisson Company references
Macrospace Trading Proprietary Ltd. As alluded to above, Macrospace is one of
the obligors in the facility G agreement. Macrospace guaranteed the obligations
7
of the respondent to RMB in respect of facility G and facility B agreements. In
this regard Macrospace concluded a security cession with RMB on or about 27
July 2018 in terms of which Macrospace ceded the rentals payable in tenns of the
Radisson lease agreement to the applicant.
[14] The legal representatives of RMB addressed a letter to Macrospace
infonning it that it (RMB) was enforcing its security cession. A letter was also
sent to Waterclub Body Corporate demanding that rentals were to be paid to RMB
and not Macrospace, following the enforcement of the cession. Waterclub Body
Corporate responded to this letter and indicated that in arbitration proceedings
conducted between Macrospace and it, the arbitrator held that the Radisson lease
agreement was unlawful and that the Macrospace security cession was thus not
enforceable. It appears that Macrospace did not pay the rentals it received from
Waterclub which triggered the default event as envisaged in facility G.
[15] Khumonetix denies any indebtedness to RMB in respect of facility B. Its
case is that this facility has been paid in full through the proceeds of Abbeydale.
It contends that deficit, if any, was brought about by RMB which impermissibly,
improperly and unlawfully resurrected facility B by transferring money from an
account which has been closed into facility G. In this case, as I understand the
argument, Khumonetix avers that RMB unlawfully created a non-existent debt
for Khumonetix.
[16] Khumonetics further opposes the application for its final winding up on the
basis that it has demonstrated that its opposition of the application was on bona
fide and reasonable grounds. On this basis it implores this court to exercise its
discretion and refuse to wind it up.
[ 17] Section 344 of the Companies Act 61 of 1973 (Companies Act) provides
8
different circumstances in which a company may be wound up. RMB contends
that Khumonetix is unable to pay its debts when they became due. Section 344(1),
read withs 345, sets out circumstances when the company is deemed to be unable
to pay its debts. Section 345, in relevance to the case before me, inter alia
provides that a company shall be deemed to be unable to pay its debts if: (i) a
creditor to whom the company is indebted in a sum of less than Rl 00 is due;
(ii) in circumstances where a company has been served with a demand requiring
it to pay the sum due and such demand having been served on the company by
leaving the letter of demand at its registered office; (iii) it is proved to the
satisfaction of the court that the company is unable to pay its debts.
[18] It is common cause that RMB and Investec advanced money as lenders to
Khumonetix as a bon-ower in terms of facilities B and G. RMB contends that
Khumonetix owes it money. Notwithstanding the strenuous opposition by
Khumonetix, the locus standi of RMB is unchallenged and has been established.
Even in respect of facility B, which Khumonetix contends had been closed, the
evidence reveals the contrary and thus the standing of RMB is beyond question.
[19] It is common cause that statutmy letters of demand in respect of both
facilities were served on Khumonetix at its registered address as required by
s 345(l)(a)(i) of the Companies Act. In tenns of these demands, RMB alleged
that Khumonetix was indebted to it in the amount ofR514 861 656.84 in respect
of facility B and R696 844 859.41 in respect of facility G, plus further interest
flowing from both debts.
[20] It is perhaps convenient to start with the issue of facility G. It is common
9
cause that in respect of that claim arising out of this facility, the due date for its
final payment was 30 November 2025. In its answering affidavit, Khumonetix
states the following:
'Khumonetix will when the sum falls due for payment, have sold sufficient of its assets namely
(immovable properties comprising shopping centers, office blocks and the like) before then to
be able to pay whatever sum is due in tenns of this facility on that date.'
[21] As a starting point, the above paragraph expels any doubt that Khumonetix
admitted that it was indebted to RMB so much so that it intended to sell its
immovable properties in order to liquidate the debt. An allegation is made in the
answering affidavit that the total reasonable realizable value of the assets of
Khumonetix is about RI 664 106 538.00, the value of which Khumonetics avers
far exceeded whatever is owed to RMB. Subsequent to the granting of the
provisional order, Khumonetix filed a comprehensive further affidavit setting out
what it calls 'developments concerning Khumonetix's good faith and reasonable
defences opposing the confinnation of the rule nisi.' What one would not find in
that affidavit, is any reference to the sale of any property spoken about in the
answering affidavit as quoted in para 20 above.
[22] Khumonetix does not explain if the sales took place or not. It does not say
if the sales took place what was realised in the sale. I accept that reference is made
of certain sales of the assets as well as valuations but those in my view do not
refer to the intended sales referred to in paragraph 20 above. If they did, there was
no reason to allege that the properties will be sold in order to pay the debt in
facility G.
[23] The date of 30 November 2025 has come and gone. On 1 December 2025,
RMB' s attorneys addressed a letter to Khumonetix, inter alia, calling upon it to
make full payment of the outstanding balance due within five days. If any
payment had been done following the mooted sale of properties, then in that case,
Khumonetix would have responded to the demand for payment, even if it was a
mere explanation as to what happened to those intended sales. RMB avers in the
replying affidavit that 'as at the date of that (sic) affidavit, Khumonetics had(sic)
failed to repay the outstanding amount in tenns of the facility G Agreement.'
Khumonetix has not placed any evidence of any further payment it made
following its admitted indebtedness. The attack on the certificate of balances
does not assist Khumonetix in view of its admission of indebtedness.
[24] Khumonetix has not placed any evidence on record to gamsay the
conectness of the facts brought by RMB as to its debt. Khumonetix does not even
say what the amount, if any, was at least due by 30 November 2025 and whether
it paid that amount it believed was the correct amount to be paid while also
seeking a debatement of any disputed amount. It disputes everything without
merits. What Khumonetix sought to do in these proceedings, was to bring forth
denials of default events without any counter facts. The defence that the amount
outstanding in tenns of this facility was not due falls to be rejected. In light of the
Plascon-Evans rule, I have to accept the version of RMB where in the replying
affidavit it is said that, at the time of deposing of that document, Khumonetix had
not made any payment.
[25] With regard to facility B, Khumonetix also raised some defences, chief of
which boil down to the facility having been fully paid. This defence is anchored
on the averment that RMB unlawfully transfen-ed funds from an account which
had been fully paid, the facility" B. In one of the cases involving RMB and
Macrospace, one of the obligors in facility B, the same challenge was raised
11
concerning the recalibration. That court in the unrep01ted judgment of First Rand
Bank Ltd v Macrospace Trading Ltd,5 Holderness J said the following:
1. 'Moreover , it appears from the emails exchanged between Miss Swart and Rand B in
September, which Mr Giorgio was copied in, that the recalibration and transfers between
facilities Band G was clearly communicated to Macrospace, and culminated in the subsequent
agreement to extend three payment dates in terms of facility B to July 2024.
11. It appears that even if, at best for Macrospace, the recalibration was inaccurate or not
lawfully done in terms of the contractual arrangements, this would result in an increase in the
amount owing under facility G, Macrospace remains indebted to RMB.'
[26] I agree with the sentiments expressed in Macrospace case. The reason is
that what applies to Macrospace equally applies to Khumonetix in these
proceedings . On this basis alone, nothing futther needs be said and in view of the
stare decisis doctrine, though this Comt is not bound by that decision, I have no
reason to depart from what the court in that case held. I hold the view that it
articulated the correct position with regard to the recalibration which applied
equally to Macrospace and Khumonetix . Even if it could be said that the debt in
facility B was opposed on bona fide and reasonable grounds, which I do not agree
with, Khumonetix would still be saddled with the issues in facility G and winding
up may still follow without considering the indebtedness of Khumonetix in
facility B. For this reason, the alleged 'revival' of facility B takes this matter no
fmther. The December addendum as quoted in paragraph 4 above clearly sets out
how the calibration ought to be applied. RMB applied it as agreed. I cannot see
any inkling of unlawfulness in that application.
[2 7] Khumonetix contends that the estimated rental income of at least four
obligors was not considered by RMB in the performance of the recalibration.
obligors was not considered by RMB in the performance of the recalibration.
s Unreported case number 2025-008682, Western Cape Division delivered on 3 November 2025.
12
These obligors are FWP, Basfour, Mr Georgiou, Artie and Carul. In the further
affidavit, Khumonetix stated that:
'Had the rental income of all of the seven obligors estimated by Khumonetix being brought
into account, and had the potential rental income in respect of the vacant spaces and provisional
leases during the ensuing 12 months also been taken into account, the recalibration would have
yielded a figure that would not have allowed for recalibration exercise to be conducted.'
[28] The applicant counters this by alleging that the deponent to the affidavit of
Khumonetix was untruthful. In this regard it is contended that K.humonetix has
failed to disclose the correct facts. RMB, in any case, contends that absent facility
B, winding up of Khumonetix may still follow on the basis of default in respect
of facility G. I agree as alluded to above and nothing fu1iher needs to be said on
this point.
[29] Section 347(1) of the Companies Act clothes this court with a discretion in
cases of winding up of companies. This section provides that the 'comi may grant
or dismiss any application under s 346, or adjourn the hearing thereof,
conditionally or unconditionally, or make any interim order or any other it may
deem just, but the com1 shall not refuse to make a winding up order only on the
ground that the assets of the company have been m01tgaged to an amount equal
or in excess of those assets or that the company has no assets.'
[30] In the fu11her affidavit, Khumonetix refers to the affidavit of its expert, Mr
St1ydom (Strydom), who was instructed by MFT to calculate its nett asset value
(NSV). It is contended that based on the report of Strydom, the assets ofMFT far
exceed its liabilities by a wide margin. On this basis, it is contended that MFT is
solvent and has substantial assets. Because MFT holds that the affidavit and
report of Strydom contain confidential infonnat ion, a redacted document was
filed.
13
[31] I have difficulties with the repmt of Strydom. In his report, Mr Strydom
alluded to the limitation he had in the compilation of the report. He makes the
following statement under the heading 'Limitations':
'I have relied on the statements of Assets and liabilities and further information provided to me
by MFT Management as indicated in the report. No audit was performed on the statements of
Assets and Liabilities , and no opinion is expressed on the reasonableness of the information
provided to me.'
[32] The first concern is the weight to be attached to unaudited statements. It
seems to me that Strydom relied squarely on information which MFT
management wanted him to see and work with. He does not seem to have
conducted his own independent investigation concerning MFT. For example, he
makes no reference to any past yearly financial statements ofMFT. One wonders
what the status of those unaudited statements is. On the face of it, they appear to
be inadmissible on the basis of hearsay. There is no evidence as to who compiled
them. What were the source documents from where they were compiled? For
these reasons, I can attach no weight on his assertion that the assets of MFT
exceeded its liabilities. For all intents and purposes, reliance is based on
statements MFT could simply have attached to these proceedings themselves and
argue that the cou1t had regard to them and make a determination.
[33] Apmi from this, on its own version, Khumonetix is commercially insolvent.
In his repmt, Strydom deals with the valuation of the assets of shares held by
MFT in Khumonetix. He states in his repmt that when comparing the total assets
to the total liabilities, a deficit arose and therefore this meant that the shares were
not worth anything. The deficit was shown as a liability of MFT. It appears on
that basis that Khumonetix accepted that it was insolvent.
[34] Khumonetix wants this comt to make an assessment of its solvency, yet it
14
found it prudent to redact imp01iant information in the rep01t to enable the court
to do just that. For the court to accept the conclusion of an expe1t, it needs to look
in_to the process and facts which underpin the conclusion. This Comt was denied
that opportunity. Much as Khumonetix seeks to aver that the application is
opposed on bona fide and reasonable grounds, I am unable to agree.
[3 5] Khumonetix fmther contended that the primary intention of RMB was to
enforce the payment of its debt by way of liquidation , which was impennissible.
I disagree. On its own version, Khumonetix staited to sell some of its assets.
Should this eventuate, there is a likelihood that some creditors may be prejudiced
by this conduct; sale of the assets under these circumstances will not be to the
benefit of the creditors and I cannot exercise my discretion by allowing acts which
would disadvantage the majority of the creditors .
[36] For all the reasons stated above , I conclude that Khumonetix is unable to
pay its debts and that it would be for the benefit of the creditors that Khumonetix
be placed finally in liquidation for the benefit of the creditors.
Order
[3 7] In the result, the following order is granted:
1 The respondent company is hereby placed in final liquidation.
2 The costs of application, including the costs of two counsel on scale C, shall
be the costs in the winding up of the respondent. •
15
Appearances:
For applicant:
Instructed by:
For respondent:
Instructed by:
16
Smit SC (with PG Louw)
Edward Nathan Sonnenbergs Inc, Johannesburg
Phatshoane Henney Attorneys, Bloemfontein
S Symon (with D Sive)
Fluxmans Inc, Johannesburg
EG Cooper Matjiedt, Bloemfontein.