on·rcE OPTII E C lll f'.f' J UST IC E
R F.P U DLI C O F SOtrr ll AFR IC A
IN THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA DIVISION, MIDDELBURG (LOyAL SEAT) - -~ ,.
KESEGAN SUBRA
In re:
THE EMPLOYEES OF
LISTED ON ANNEXURE
And
SFTENERGY(PTY)LTD
THE STANDARD BANK OF SOUTH AFRICA LTD
THE COMPANIES AND INTELLECTUAL
PROPERTIES COMMISSION
COURT ORDER
CASE NO.: 1476-2024
APPLICANT
1sr RESPONDENT
2 ND RESPONDENT
3Ro RESPONDENT
The Judge heard the matter on the 218TJuly 2026 and electronically circulated the
judgment on the 24rHAugust 2026, gave an order in paragraph " 35" as follows:
The following order is made :
1 Mr Subramoney is granted leave to intervene in the employees' business rescue
application under case number 1476/2024.
2 It is confirmed that the matters were consolidated by order of the Judge President
on 13 February 2025, alternatively by Msibi AJ on 7 October 2025.
3 The application by Merchant West to intervene is dismissed .
4 The late filing by the employees of their replying affidavit in their application to
place SFT Energy (Pty) Ltd under business rescue supervision is condoned .
5 The application by the employees of SFT Energy (Pty) Ltd to place SFT Energy
(Pty) under business rescue supervision is dismissed .
6 The application by Mr Subramoney to place SFT Energy (Pty) Ltd under business
rescue supervision is dismissed. .- .-i, nH Al'H1 ct\
- \JR,- Of- • ,.
. TH •c P\(,H t.Ucu.L D l\.l\~\UN ---
7 Mr Subramoney, in his pe ~·0Nar Tb1~pa'; 1r,·L~·:c~;'d~ e'd"to pay-fll-.e cost \ of those
parties opposing his applic • t!Oii7o pla~ ')(~~lyf . . ,:;ft. er usiness
rescue supervision, on an al orn • . •. t _ lien\i'it-oS.ti, ~osl • •. i ~i .,~ e he costs
of two counsel, where so em11o ,~~ / .,,-.:,-.1--"'
~;, . .
,,~OF-~ ~Mlo-005 ~
8 Mr Subramoney, in his personal capacity, is ordered t0-~")~y-th,e.1costs.r°lf those
parties opposing the employeE'@"p_p icat~~i~t~t.(En_ki ~ (P-ty)-1:td under
' \ \ Jh • M\f ) ,. _;__- -----·
business rescue supervision, o ..atterney-an client scale. The costs to include
the costs of two counsel, where so employed.
9 Mr Subramoney, in his personal capacity, is ordered to pay the costs of the
employees in their application to place SFT Energy (Pty) Ltd under business
rescue supervision , on an attorney and client scale. The costs to include the costs
of two counsel, where so employed.
10 The determination of placing SFT Energy (Pty) Ltd in liquidation in terms of section
131(1)(4)(b) of the Companies Act 71 of 2008 is postponed to a date to be
determined as set out below.
11 The liquidation applications of First Rand Bank Ltd and Standard Bank of South
Africa Ltd, and Sasol Oil (Pty) Ltd (Sasol) are postponed to a date to be determined
as set out below.
2
12 The attorneys of the parties to the consolidated matter are ordered to, amongst
themselves and within ten days from this order, complete and file a Form B.
13 The attorneys of First Rand Bank Ltd are ordered to enrol the matter within 15 days
of this order.
14 Should any party fail or refuse to co-operate in complying with the orders relating
to the determination of the date of hearing or the completion of Form B, any other
party may approach the registrar for enrolment of the matter for jud icial case
management by this court.
15 The date of hearing is to be arranged in conjunction with this court's secretary.
16 The parties are invited to file supplementary heads of argument by no later than
15 September 2026, strictly dealing with (a) whether a liquidation order in terms of
section 131 (1 )(4)(b) of the Companies Act 71 of 2008 may be granted whilst a
business rescue application is pending, and (b) whether section 131 envisages
more than one business rescue application.
~.&~1<,Ma.~ _, 050 BY THE COURT
2026 -08- 2 ~
Mlb-MIO-OOS
3
IN THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA DIVISION , MIDDELBURG
Consolidated case number: 1476/2024
( l ) Reporta ble: ¥85/No
(2) Of interest to other Judges: ¥es/No
(3) Revised: ¥es/No
In the matter between:
d-lt\ ()'8 \ ~~ ;i.~
DATE
KESEGAN SUBRAMONEY
In re:
THE EMPLOYEES OF SFT ENERGY (PTY) LTD
LISTED ON ANNEXURE A
and
SFT ENERGY (PTY) LTD
THE STANDARD BANK OF SOUTH AFRICA LTD
THE COMPANIES AND INTELLECTUAL
PROPERTIES COMMISSION
And in the matter between:
THE STANDARD BANK OF SOUTH AFRICA LTD
and
Intervening applicant
Applicants
First respondent
Second responde nt
Third respondent
Applicant
I
r
SFT ENERGY (PTY) LTD Respondent
And in the matter between:
SASOL OIL (PTY) LTD Applicant
and
SFT ENERGY (PTY) LTD Respondent
And in the matter between:
FIRSTRAND BANK LTD Applicant
and
SFT ENERGY (PTY) LTD Respondent
Delivered: This judgment was handed down electronically by circulation to the
parties' legal representatives by email. The dale and time for hand-down is deemed
to be 24 August 2026 at 10h00.
JUDGMENT
Schutte AJ
Introduction
[1] When liquidation and business rescue applications compete, the choice is not
between good and bad, but between bad and worse. The parties agree that I should
favour the bad option but disagree whether it is liquidation or business rescue. It
seems that what is bad for the goose is worse for the gander.
2
[2] The director, who is also the sole shareholder, says with his business rescue
plan the company will emerge "not weakened but strengthened, not diminished but
enlarged, not surviving but thriving, creating value for creditors, employees,
communities, customers, and the country". But what weight can I attach to this when
the company owes its creditors, on the director's version, at least R238 million?1 And
where the company had ceded the same debtor's book to no less than seven
creditors?2
The business rescue supporters
[3) In this matter, the business rescue supporters/applicants are:
3.1 SFT Energy (Pty) Ltd (the company), a private company with limited liability,
conducting business as a major fuel reseller.
3.2 Mr Subramoney, the sole director, sole shareholder, and sole beneficiary of
the company.
3.3 The 22 non-trade union affiliated employees of the company.3 Mr
Subramoney confirmed in October 2025 that the company employed 22 employees.4
By July 2026, a further 7 employees had joined the company.
The liquidation supporters
[4] The liquidation supporters/applicants are:
4.1 First Rand Bank Ltd (FRB), a public company and registered bank.
1 At page 21(25).
2 At page 20(173) read with pages 21(44)-21(46).
3 Paragraph 75 at page 9(14).
4 Paragraph 26 at page 43(121).
3
4.2 Standard Bank of South Africa Ltd (SBSA), a public company and registered
bank.
4.3 Sasol Oil (Ply) Ltd (Sasol), a private company with limited liability.
Point in limine that matters were not consolidated
[5] When arriving at court on 21 July 2026, I was under the impression that the
following consolidated matters served on my opposed motion roll:
5.1 The employees' business rescue application, opposed by FRB.
5.2 Mr Subramoney's business rescue application, opposed by FRB and Sasol.
5.3 The liquidation applications of SBSA, FRB, and Sasol, all opposed by the
company.
5.4 The company's application to stay proceedings in the FRB application.
[6] To my surprise, the business rescue supporters argued that the matters had
not been consolidated. The liquidation supporters insisted that the judge president
had consolidated the matters at a judicial case management hearing.
[7] Whilst I do not question a litigant's right to raise points in limine, I do question
the timing. The point was raised from the bar long after FRB and the company had
confirmed consolidation.5 The more complex the matter, such as the present, the
more counsel involved, such as the present where 11 counsel appeared, and the
more voluminous the matter, such as the present where the papers exceed 2400
pages, and where the employees' livelihoods are at stake, such as the present
matter, the greater the need to raise points in limine by the latest in the heads of
argument.
5 In their respective heads of argument.
4
[8] No consolidation order was available; hence, I am to determine the correct
position. This I did, by having regard to the court bundle, the heads of argument, and
the events that led to the judicial case management hearing.
[9] The consolidated matters were uploaded onto Caselines before close of the
roll. Had the business rescue supporters genuinely believed that the matters were
not consolidated, surely, they would have immediately protested. They did not.
[1 OJ In addition, the filed heads of argument pertinently drew my attention to the
consolidation. The company's written heads of argument informed me that the
"application is a consolidated application" and listed the consolidated matters as the
three liquidation and two business rescue applications.
[11] In FRB's heads of argument, filed in March 2025, mention is made that four
applications were consolidated. By then, the fifth application, Mr Subramoney's
business rescue application, had not been lodged. He later lodged it under the same
case number as the employees' application. From a procedural standpoint, the fate
of the employees' application will also be that of Mr Subramoney's.
[12] Mr Subramoney's heads of argument, filed after FRB's heads of argument,
are silent on the issue of consolidation. Had Mr Subramoney genuinely believed that
the matters were not consolidated, his heads of argument should have reflected it.
[13] The employees did not file heads of argument nor did they, before the
hearing, raise any issue in that regard.
[14] The events that led to the judicial case management hearing before the Judge
President confirm that the matters were consolidated. In November 2024, FRB
applied to the Judge President to case manage the matters. In that founding
affidavit,6 FRB's attorney requested the Judge President to case manage the three
liquidations and the employees' business rescue applications "in order to be
6 At page 44(4) para 7.
5
allocated a hearing date so that these applications (concerning the same facts and
issues) are disposed of simultaneously."
[15] FRB's attorneys explained that the application was necessitated because the
company had failed to sign Form B, prescribed in our division's practice directives.
The attorneys' covering letter states that consolidation would be in the interests of
justice and to not strain judicial resources.
[16] The Judge President acceded to the request. The legal representatives of
FRB, Standard Bank, Sasol, SFT Energy and the employees of SFT Energy then
appeared before the judge president on 13 February 2025. FRB later recorded the
events leading up to and on 13 February 2025 as follows:
"On 22 November 2024, after several failed attempts to have SFT Energy agree to a
form B to progress the matter to finality, FRB's attorney of record deposed to an
affidavit to request that the FRB Liquidation Application, the Standard Bank
Liquidation Application, the Sasol Liquidation Application and the Business Rescue
Application be case managed in order to be allocated a hearing date so that these
applications (concerning the same facts and issues) can be disposed of
simultaneously. This request was supported by Standard Bank and Sasol by way of
affidavit.
At the case management meeting held before the Honourable Judge President it was
inter a/ia agreed and directed that the four applications would be consolidated under
case number 1476/2024 and set down on the opposed motion roll for hearing on 7
October 2025."
[17] Mr Subramoney did not engage any of FRB's allegations in his replying
affidavit, where he should have, had he believed the allegations were untrue.
6
[18) The court bundle contains FRB's attorneys' email, addressed at 13:41 on the
date of the judicial case management, to the Judge President's registrar. Attached to
that email is a draft order, wherein it refers to consolidation.7
[19) There are also other grounds to conclude that the matters were consolidated.
In June 2024, Mr Subramoney lodged an application to stay proceedings. In his
notice of motion,8 he requested that the liquidation proceedings "be temporarily
stayed pending the adjudication and determination of the consolidation application of
the winding up proceedings of matters with case numbers 2148/2024, 1476/2024
and 2596/2024".9
[20) In February 2026, Mr Subramoney's attorney stated the following in an
affidavit in an unrelated procedural dispute:
"The consolidated matters before this Court involve complex commercial disputes
arising from multiple applications, including three liquidation applications and a
business rescue application. The record comprises 2,297 pages. Multiple parties are
involved, each represented by separate legal teams. The factual matrix is
intertwined, and the legal issues overlap significantly.
The interests of justice demand that oral argument in such complex, consolidated
matters be heard on consecutive days. "10
[21) The inescapable inference is that the Judge President acceded to the parties'
agreement to consolidate the matters.
[22) But the business rescue supporters argue that consolidation may, in terms of
rule 11 of the Uniform Rules of Court, only be granted on application, which they say
there was not. I understand this to mean that the consolidation order was irregular.
[23] Rule 11 stipulates as follows:
7 At pages 39(1) - 39(8).
8 Paragraph 4.
9 At page 34(2).
10 At page 44(72).
7
"Where separate actions have been instituted and it appears to the court convenient
to do so, it may upon the application of any party thereto and after notice to all
interested parties, make an order consolidating such actions, whereupon -
(a) the said actions shall proceed as one action;
(b) the provisions of rule 1 O shall mutatis mutandis apply with regard to the action so
consolidated; and
(c) the court may make any order which to it seems meet with regard to the further
procedure, and may give one judgment disposing of all matters in dispute in the said
actions."
[24] FRB's application to the judge president, supported by a founding affidavit, is,
in my view, a proper application for, amongst others, consolidation. But even if I am
wrong, the consolidation at the judicial case management hearing was proper. This
is because rule 37A has dramatically transformed the way matters are litigated.
[25] In terms of rule 37 A(2):
"Case management through judicial intervention -
(a) shall be used in the interests of justice to alleviate congested trial rolls and to
address the problems which cause delays in the finalisation of cases;
(b) the nature and extent of which shall be complemented by the relevant directives
or practices of the Division in which the proceedings are pending; and
( c) shall be construed and applied in accordance with the principle that,
notwithstanding the provisions herein providing for judicial case management, the
primary responsibility remains with the parties and their legal representatives to
prepare properly, comply with all rules of court, and act professionally in expediting
the matter towards trial and adjudication." (My emphasis.)
[26] Rule 37A(1)(b) stipulates that a judicial case management system applies to
any proceedings designated by the Judge President. Paragraph 5 of our Division's
Practice Directives provides that opposed motions are to be case-managed by
completing a prescribed Form B at any time after the filing of a notice to oppose. If a
8
party fails to co-operate in completing the form, where, amongst others, timeframes
are to be set out, then the co-operating party may, on affidavit, approach the Judge
President for permission to enrol the matter for case management.
(27] Rule 37 A envisages an "intervention", a scenario where courts take control of
cases to achieve, as soon as possible, settlement or trial readiness, the latter on the
narrowest list of disputes. The purpose of judicial case management is to free court
time and to shorten the waiting list for trial dates. It is to utilise public funds as best
as possible, a goal worth embracing by all stakeholders.
(28] When the parties appeared at the judicial case management hearing, they
had agreed to consolidation. It is trite that parties are at liberty to agree to extend or
shorten timeframes and to eliminate unnecessary processes, because the rules are
for the court and not the court for the rules. In Federated Trust Ltd v Botha,11 the
court held that:
"The rules are not an end in themselves to be observed for their own sake. They are
provided to secure the inexpensive and expeditious completion of litigation before the
courts."
[29] can think of no better example of judicial intervention at work than the
current matter. The legal questions and facts in the consolidated applications
overlap, thereby justifying, if not necessitating, consolidation, especially where the
parties have agreed to consolidate these complex matters. Their subsequent actions
align with the consolidation order.
(30] It is for these reasons that I held that the matters were consolidated.
Merchant West's intervention application
[31] The consolidation point in limine was, however, not the last surprise sprung
on me by the business rescue supporters. Merchant West, a creditor of the
11 Federated Trust Ltd v Botha 1978 (3) SA 645 (A) at 654D.
9
company, applied, from the bar, for leave to intervene to lodge an application to
place the company under business rescue supervision. Generally, the closer a
delay-causing indulgence is sought to the hearing date, the more probable it is that it
is sought with an ulterior motive.
[32] Merchant West's counsel indicated that a successful intervention application
would lead to a postponement; hence, Merchant West tendered the wasted costs
occasioned by the belated application to intervene. Merchant West sought this
indulgence more than two years after the employees' business rescue application
had been lodged. As I have said, the closer the indulgence to the hearing date, the
more probable that the indulgence is sought with an ulterior motive.
[33] Merchant West's counsel informed me that Merchant West's claim against the
company was approximately R27 million and that it had, shortly before the hearing,
obtained knowledge of the current applications. Merchant West then resolved to
apply for intervention, but only after the company had provided it with the company's
management statements.
[34] But Merchant West's name appears several times in the court bundle. In
FRB's answering affidavit to the employees' business rescue application, FRB
recorded that the company's creditors amounted to R655 million, and that Merchant
West was one of the creditors, with a claim of R30 million.12
[35] In FRB's attorneys' covering letter to the Judge President, wherein they
requested that the matters be case-managed, the attorneys recorded that the letter
was addressed to the Judge President jointly by FRB, SBSA, Genfin, and Merchant
West. The covering letter refers to the current applications. There is proof that the
letter was sent to Merchant West's attorneys.
[36] The letter also confirmed that Merchant West had launched an urgent
application on 25 June 2024 and that there were multiple liquidation and business
rescue applications pending against the company. Clearly, Merchant West had
rescue applications pending against the company. Clearly, Merchant West had
12 At page 14(14).
10
knowledge of the employees' business rescue application as far back as August
2024. Its knowledge was not as recent.
[37] It struck me as odd that the company would, shortly before the hearing of a
matter which had been set down for months, provide its management statements to
a creditor that had been inactive in the pending litigation. Even more odd that the
creditor would then independently resolve to support the business rescue
application, by lodging a surprise application to intervene on the morning of the
hearing. It is beyond comprehension that the management statements were given to
a creditor and not to the court, or, for that matter, to the litigating creditors, and even
more odd that the statements were not introduced by Mr Subramoney. In Merchant
West's hands, the company's management statements constitute hearsay evidence.
[38] But the management statements are of no moment, as the employees, in their
belated replying affidavit, had discussed them.
[39] It has also not escaped me that another creditor had on 3 October 2025,
shortly before the scheduled hearing of 7 October 2025, lodged a business rescue
application in Mbombela, our main seat.13 Merchant West's belated intervention
application looked all too familiar. It was also too familiar when the business rescue
supporters pushed for the matter's postponement. The liquidation supporters were
intent on finalisation.
[40] Merchant West's belated intervention application requires context. In Van
Greunen v Sigma Switchboard Manufacturing CC, 14 the court remarked as follows
with regard to the inherent urgency of liquidation applications:
"In recognition of the in-built urgency of liquidation applications, the practice has
developed in this division that it is unnecessary for applicants to formalistically recite
a standard set of allegations to satisfy the terms of rule 6(12) and to seek and obtain
a specific order condoning the non-compliance with provisions of rule 6. The practice
13 At page 44(40).
13 At page 44(40).
14 Van Greunen v Sigma Switchboard Manufacturing CC [2003] ZAECHC 12 at para 10.
11
sensibly works from the reasonable and recognised assumption that all liquidation
applications are urgent and so should be treated differently to other applications."
(In our division we do not have a similar practice. The principle, that liquidations are
inherently urgent, however, applies.)
[41] In A 1 Capital (Ply) Ltd v Urban Lifestyle Investment Holdings (Pty) Ltd and
Others, 15 the court held that business rescue proceedings:
" ... are not to be approached in a leisurely fashion by an applicant. They are to be
approached with the maximum possible expedition and at the first possible
opportunity. 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. As was stated in DH Brothers Industries (Ply) Ltd v Gribnitz NO
and Others:
'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'."
[42] In Gormley v West City Precinct Properties (Ply) Ltd, 16 the court stated that
business rescue proceedings envisage a short-term approach to the financial affairs
of a company, because the financial world requires certainty and creditors "cannot
be left in a state of flux for an indefinite period".
[43] Notwithstanding the inherent urgency of liquidation and business rescue
applications, the situation unfolding before me was that the business rescue
supporters were pleading for Merchant West to be allowed leave to intervene and
thus essentially for the matter to be postponed. The business rescue supporters did
not approach the company's own business rescue application with "maximum
not approach the company's own business rescue application with "maximum
possible expedition".
15 A 1 Capital (Ply) Ltd v Urban Lifestyle Investment Holdings (Ply) Ltd and Others [2026] ZAKZDHC
21 at para 37.
16 Gormley v West City Precinct Properties (Ply) Ltd 2013 JDR 1895 (WCC) para 11.
12
[44] Interventions in business rescue proceedings are governed by rule 12 and
section 131(3) read with section 128(1)(a) of the Companies Act 71 of 2008. (Unless
stated otherwise, where in this judgment I refer to sections it will be to a section of
the Companies Act 71 of 2008.)
[45] Rule 12 states as follows:
"Any person entitled to join as a plaintiff or liable to be joined as a defendant in any
action may, on notice to all parties, at any stage of the proceedings apply for leave to
intervene as a plaintiff or a defendant. The court may upon such application make
such order, including any order as to costs, and give such directions as to further
procedure in the action as to it may seem meet."
[46] Section 131 (3) states as follows:
"Each affected person has a right to participate in the hearing of the application in
terms of this section."
[47] Section 128(1)(a) defines "an affected person" as a shareholder or creditor of
a company or any registered trade union representing employees of the company or
those employees not represented by a registered trade union.
[48] In Peermont Global (KZN) (Pty) Ltd v Afrisun KZN (Pty) Ltd tla Sibaya Casino
and Entertainment Kingdom and others and a related matter,17 the court stated this
about rule 11:
"The rule is equally applicable to applications. It has not overridden or replaced our
common law, which remains applicable to interventions. Our courts have held that a
party is entitled to intervene as an applicant in an application where:
18.1 it has a direct and substantial interest in the right that is the subject matter of the
application, which could be prejudiced by the judgment of the court. The interest
must be such that the intervenor's joinder is either necessary or convenient. But the
17 Peermont Global (KZN) (Ply) Ltd v Afrisun KZN (Pty) Ltd Ua Sibaya Casino and Entertainment
Kingdom and others and a related matter [2020] 4 All SA 226 (KZP) at para 18.
13
possibility that a legal interest exists is sufficient, and it is not necessary for the court
positively to determine that it exists;
18.2 the allegations made by the intervening applicant constitute a prima facie case
or defence. It is, however, not necessary for the intervenor to satisfy the court that it
will succeed in its case or defence. It is sufficient for the party seeking to intervene to
rely on allegations which if they can be proved in the main application, would entitle it
to succeed. In assessing the intervenor's standing, then, the court must assume that
the allegations it advances are true and correct; and
18.3 the application is made seriously and is not frivolous."
[49] The company's counsel referred me to Engen Petroleum Ltd v Multi Waste
(Ply) Ltd and Others 2012 (5) SA 596 (GSJ) and Timasani (Ply) Ltd and another v
Afrimat Iron Ore (Ply) Ltd [2021] 3 All SA 843 (SCA). In Engen Petroleum, the court
held that an affected person has a right to participate in the hearing and need not
require the court's permission to intervene, but that leave may be "necessary as a
procedural requirement." 18 In Timasani, the issue in dispute was the creditor's right
to participate in proceedings post-business rescue supervision order, which is
governed by section 145. The matter before me is distinguishable from Timasani in
that the current matter involves the position pre-business rescue order.
[50] Mr Subramoney's counsel referred me to Merchant West (Ply) Ltd v Crestar
Printers & Publishers (Ply) Ltd, 19 where the main issue in dispute was whether an
applicant for liquidation may apply for the upliftment of the suspension of liquidation
proceedings, pending business rescue proceedings, which is not the current issue.
[51] I return to the current matter. Merchant West knew from early 2024 about the
liquidation and the employees' business rescue applications. It participated by joining
FRB's request to case manage the matter and ostensibly supported the company's
FRB's request to case manage the matter and ostensibly supported the company's
liquidation. Two years later, it changed its mind and elected to support the business
rescue, seeking to intervene.
18 Engen Petroleum Ltd v Multi Waste (Ply) Ltd and Others 2012 (5) SA 596 (GSJ) at para 30.
19 Merchant West (Ply) Ltd v Crestar Printers & Publishers (Pty) Ltd [2021] ZAGPPHC 397.
14
[52] Must a court tolerate and reward this by affording Merchant West a blanket
right to participate when it suits Merchant West? I do not think so, because such a
stance would allow Merchant West, and for that matter any intervening party, to
abuse the court's process and to derail pending litigation to the prejudice of, at least,
the liquidation supporters.
[53] Section 131 (3) does not specify when and how an affected person is to
indicate his/her/its intention to participate, nor does it specify the form of
participation. Does an affected person have the right to make submissions from the
bar, or must the submissions be in the form of pleadings? It would, in my view, be
absurd to allow an affected party in business rescue proceedings more procedural
rights than the parties cited in the proceedings. In liquidations, there is no statutory
obligation on an applicant to notify all the affected parties; hence, interventions in
liquidations occur as and when an affected party obtains knowledge of the
liquidation. The difference is easily understood.
[54] A cited party who opposes the business rescue application is expected to file
a notice of intention to oppose within a prescribed period, and thereafter an
answering affidavit within a prescribed period. Why should that be different for any
intervening affected party? There seems to be no logical reason. In my view, a non
cited affected party must present his/her/its case in accordance with the rules of
court, and that also applies to the rules relating to urgency. Such an approach will
oblige participants to file their papers within the timeframes set for the cited parties
and will support the speedy finalisation of business rescue proceedings, as they
should be.
[55] In Hudson v Hudson,20 the court held that it constitutes an abuse of process if
court process is used for a goal other than the process's object.
[56] In Van Staden NO and Others v Pro-Wiz Group (Ply) Ltd,21 the court held
that:
20 Hudson v Hudson 1927 AD 259.
15
"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."
[57] In PFC Properties (Ply) Ltd v Commissioner for the South African Revenue
Services and Others, 22 the applicant therein issued its business rescue application
out of one court. The company then amended its registered address to another
court's jurisdiction. The applicant withdrew the first business rescue application and
issued a fresh business rescue application with the court having jurisdiction over the
amended registered address. The same playbook is unfolding in the current matter.
Here, business rescue applications are currently pending in both our main and local
seats.
[58] In Vil/a Crop Protection (Pty) Ltd v Bayer Intellectual Property GmbH,23 the
court stated:
"This binary position fails to appreciate the true juridical nature of the power enjoyed
by the courts to prevent an abuse of process, of which the doctrine of unclean hands
is a species. An abuse of process can occur in a variety of ways. The litigation may
be frivolous or vexatious. A litigant may seek to use the legal process for an ulterior
purpose or by recourse to conduct that subverts fundamental values of the rule of
law. The behaviour of the litigant may be so tainted with turpitude that the court will
not come to such a litigant's aid. The unclean hands doctrine references this latter
type of abuse. It is the abusive conduct of the litigant that, in a proper case, may
warrant the exercise of the court's power to non-suit such a litigant. The court does
so, even though the litigant claims a right that they would vindicate in the court
so, even though the litigant claims a right that they would vindicate in the court
proceedings. For this reason, the power is to be exercised with great caution. Put
simply, the court enjoys the power to safeguard the integrity of its process. The court
will only exercise this power upon a careful consideration of the prejudice that this
21 Van Staden NO and Others v Pro-Wiz Group (Ply) Ltd 2019 (4) SA 532 (SCA) at para 22.
22 PFC Properties (Ply) Ltd v Commissioner for the South African Revenue Services and Others 2024
(1) SA 400 (SCA).
23 Villa Crop Protection (Ply) Ltd v Bayer Intellectual Property GmbH 2024 (1) SA 331 (CC) at para 77.
16
may cause to the abusive litigant, and, in particular, the harm that may be
occasioned to a litigant whose claim of right will not be decided by the court. But the
court's power to prevent the abuse of its process is not determined by the right that
the abusive litigant claims."
[59] By acceding to Merchant West's application, the court would have seriously
prejudiced the liquidation supporters; a prejudice no cost order can cure. The
following example illustrates substantial financial prejudice to the liquidation
supporters. Mr Subramoney conceded that the company owes SBSA and FRB R107
million and R60 million, respectively.24 If I calculate simple interest thereon at a
conservative rate of 7% per annum, the annual interest accruing would be
R 11 690 000.00. Had I postponed the matter, the next hearing date would have been
in about 6 months. The accumulated interest would then have been almost R6
million. No cost order can rectify that type of financial prejudice because the accrued
interest would have easily outpaced any cost order, even a punitive one.
[60] The application to intervene was simply an orchestrated delaying tactic, an
abuse of process. Merchant West's application was without doubt co-ordinated with
Mr Subramoney or the company or brought for their benefit. Merchant West received
the company's management statements but remained silent, only to bring a surprise
intervention application.
[61] A postponement could also not - according to the business rescue
supporters' version - be in the interest of the company or the employees, because
the employees are working on a salary cut.
[62] The abuse of process is magnified when the following are considered:
63.1 The business rescue supporters' frequent change of attorneys.
63.2 Mr Subramoney filed his business rescue application a day before the matter
was to be heard on the opposed motion roll in October 2025.
24 At page 21(24).
17
63.3 The employees filed their supplementary affidavit, coincidentally, also a day
before the hearing of the opposed motion in October 2025.
63.4 In yet another coincidence, shortly before the October 2025 hearing, another
creditor filed a business rescue application in Mbombela, our main seat.25
63.5 The company filed its response to Sasol's summary judgment application on
the morning of the summary judgment hearing.
63.6 The business rescue supporters failed to co-operate in completing Form 8,
prompting the liquidation supporters to utilise an enforcement mechanism in our
practice directives.
63.7 The company provided Merchant West with the company's management
statements a few weeks before the 21 July 2026 hearing. It remains a mystery as to
why neither the company nor Mr Subramoney has filed these statements earlier.
63.8 The employees filed their replying affidavit two years late, and only on the eve
of the hearing of 21 July 2026.
63.9 On 21 July 2026, the union's counsel appeared in the matter, only to request
to be excused shortly thereafter.
63.1 O The business rescue supporters were content with accommodating Merchant
West's attempt to force a postponement.
63.11 The business rescue supporters' unfounded and surprise challenge to the
consolidation order.
[63] I dismissed the application to intervene on the basis that it was an abuse of
process or that an affected person is not afforded a second bite at the proverbial
25 At page 44(40).
18
cherry in terms of section 131(3) or that the application was not serious but frivolous,
as envisaged in Peermont.
Housekeeping
[64) After ruling that the matters were consolidated and dismissing the intervention
application, the parties (excluding Merchant West) agreed that I should first consider
both business rescue applications. After arguing the business rescue applications,
they also agreed that, should I consider liquidation in terms of section 131 (4)(b), I
would afford the business rescue supporters the opportunity to further address me.
From here onwards, I only dealt with the two business rescue applications.
The applicable legal principles
[65) Applications by affected persons to place companies under business rescue
supervision are governed by section 131. The relevant part stipulates as follows:
"(1) Unless a company has adopted a resolution contemplated in section 129, an
affected person may apply to a court at any time for an order placing the company
under supervision and commencing business rescue proceedings.
(2) 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.
(3) Each affected person has a right to participate in the hearing of an application in
terms of this section.
(4) After considering an application in terms of subsection (1 ), the court may-
(a)make an order placing the company under supervision and commencing business
rescue proceedings, if the court is satisfied that-
(i) the company is financially distressed;
19
(ii) the company has failed to pay over any amount in terms of an obligation under or
in terms of a public regulation, or contract, with respect to employment-related
matters; or
(iii) it is otherwise just and equitable to do so for financial reasons, and there is a
reasonable prospect for rescuing the company; or
(b) dismissing the application, together with any further necessary and appropriate
order, including an order placing the company under liquidation.
(5) ...
(6) If liquidation proceedings have already been commenced by or against the
company at the time an application is made in terms of subsection (1 ), the application
will suspend those liquidation proceedings until-
(a) the court has adjudicated upon the application; or
(b) the business rescue proceedings end, if the court makes the order applied for."
[66] Section 131 (4) imposes two jurisdictional requirements:
67.1 The applicant must establish at least one of the following three facts: The
company is financially distressed, or the company has failed to honour payments in
terms of a public regulation obligation or in terms of employment-related matters or
that it will be just and equitable for financial reasons to do so.
67.2 If the applicants (in both applications) establish the first jurisdictional fact, the
applicants must prove a reasonable prospect of rescuing the company.
[67] In terms of section 128(1)(f), financially distressed means that-
"(i) it appears to be reasonably unlikely that the company will be able to pay all of its
debts as they become due and payable within the immediately ensuing six months;
or
(ii) it appears to be reasonably likely that the company will become insolvent within
the immediately ensuing six months;"
20
[68] Because it is common cause that the company is financially distressed, the
real issues in dispute are thus whether the business rescue applicants have shown
reasonable prospect to rescue the company or to secure for creditors a better
dividend than in liquidation.
Reasonable prospect to rescue the company
[69] In Richter v Absa Bank Limited, 26 the court held that business rescue
proceedings are "meant to be a flexible, effective process of extending the lifespan of
companies and businesses. A necessary consequence thereof is limitation, to some
extent, on the power of creditors to singlehandedly curtail the life of a company". The
Supreme Court of Appeal also remarked that the focus in business rescue
proceedings is on the interests of all stakeholders, which includes employees and
trade unions, whilst in liquidation proceedings the interests of creditors and
shareholders take centre stage. Business rescue proceedings seek to protect the
interests of a wider group of stakeholders.
[70] In Oakdene Square Properlies (Ply) Ltd v Farm Bothasfontein (Kya/ami) (Ply)
Ltd, 27 the court held that the goal of business rescue proceedings is either to return
the company to solvency or to yield a better dividend in eventual liquidation. With
regard to what "reasonable prospect" entails, the court had this to say:
" ... it requires more than a mere prima facie case or an arguable possibility. Of even
greater significance, I think, is that it must be a reasonable prospect - with the
emphasis on 'reasonable' - which means that it must be a prospect based on
reasonable grounds. A mere speculative suggestion is not enough."
[71] The court held that the allegations regarding reasonable prospect must
neither be vague nor speculative, based on facts set out in the founding papers.
26 Richter v Absa Bank Limited [2015] ZASCA 100 at paras 13 and 14.
27 Oakdene Square Properties (Ply) Ltd and Others v Farm Bothasfontein (Kya/ami) (Ply) Ltd and
Others [2013] ZASCA 68 at paras 27, 29 and 30.
21
[72] In Zoneska Investments (Ply) Ltd Ila Bona/la Properties (Ply) Ltd v Midnight
Storm Investments 386 Ltd (Registration No: 2007/019270/06) and another
(Grayhaven Riches 9 Ltd and others as Interested Parties; First Rand Bank Limited
as Intervening Creditor),28 the court held that reasonable prospect means reasonable
possibility.
[73] In DH Brothers Industries (Ply) Ltd v Gribni/z NO and Others,29 the court held
that the legislator preferred proceedings that aim to restore viable companies, but
not the restoration of all companies.
[74] In Nedbank Ltd v Bes/vest 153 (Ply) Ltd; Essa and Another v Bes/vest 153
(Ply) Ltd,30 the court said that an applicant for business rescue cannot approach
court with "flimsy grounds in the hope that the [business rescue] 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."
[75] In Southern Palace Investments 265 (Ply) Ltd v Midnight Storm Investments
386 (Pt) Ltd,31 the court said the following:
"24. Whilst every case must be considered on its own merits, it is difficult to conceive
of a rescue plan in a given case that will have a reasonable prospect of success of
the company concerned continuing on a solvent basis unless it addresses the cause
of the demise or failure of the company's business, and offers a remedy therefor that
has a reasonable prospect of being sustainable. A business plan which is unlikely to
achieve anything more than to prolong the agony, i.e. by substituting one debt for
another without there being light at the end of a not too lengthy tunnel, is unlikely to
suffice. One would expect, at least, to be given some concrete and objectively
ascertainable details going beyond mere speculation in the case of a trading or
28 Zoneska Investments (Ply) Ltd tla Bonatla Properties (Pty) Ltd v Midnight Storm Investments 386
Ltd (Registration No: 2007/019270106) and another (Grayhaven Riches 9 Ltd and others as Interested
Parties; First Rand Bank Limited as Intervening CreditoI) [2012] 4 All SA 590 (WCC) at para 39.
29 DH Brothers Industries (Pty) Ltd v Gribnitz NO and Others 2014 (1) SA 103 (KZP) at para 10.
30 Nedbank Ltd v Bestvest 153 (Ply) Ltd; Essa and Another v Bes/vest 153 (Pty) Ltd and Others 2012
(5) SA 497 (WCC) at para 41.
31 Southern Palace Investments 265 (Ply) Ltd v Midnight Storm Investments 386 (Pt) Ltd [2011]
ZAWCHC 442; 2012 (2) SA 423 (WCC) at para 24.
22
prospective trading company, of:
24.1. the likely costs of rendering the company able to commence with its intended
business, or to resume the conduct of its core business;
24.2. the likely availability of the necessary cash resource in order to enable the
ailing company to meet its day-to-day expenditure, once its trading operations
commence or are resumed. 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;
24.3. the availability of any other necessary resource, such as raw materials and
human capital;
24.4. the reasons why it is suggested that the proposed business plan will have a
reasonable prospect of success."
[76] In my view, an application for business rescue can only succeed if the
applicant provides an honest, detailed, and verified or verifiable explanation covering
the following:
77.1 How it came about that the company became financially distressed.
77.2 The extent of the financial distress.
77.3 The steps the company has implemented or is planning to implement to avoid
a repeat of history.
77.4 How and when business rescue proceedings would enable the company to
return to financial health, or if return is not foreseeable, why and to what extent the
benefit to stakeholders will be better in business rescue than liquidation.
77.5 The impact of liquidation on the employees.
23
[77] It goes without saying that where the applicant is a related party, the highest
candour is expected.
[78] Put bluntly, a company in financial distress seeking business rescue
supervision must explain how it got in this financial hole, how deep the hole is and
how and when it intends to get out of the hole. A court cannot change the trajectory
of a distressed company if it does not understand how the company got there.
[79] I will now consider the facts against the legal framework in considering
whether the company has a prospect of being rescued.
The alleged causes of the company's financial distress
[80] The employees initially said that the company is in financial distress because
of the following reasons:
"the falling coal price in recent months that impacted the company's customers. the
company is currently unable to pay all its debts, but in the last month the coal price
has increased and the business is returning to profitability and it will be able to pay all
its debts as they become due and payable within the immediately ensuing six months
as the coal price has begun rising in the last month, provided we think it is placed in
the hands of a reliable manager and hence the Business Rescue process.''32
[81] In their supplementary affidavit, the employees changed their version to state
that the collapse was due to the fuel supply crisis caused by Sasol in 2023. The
employees' versions are materially contradictory.
[82] In his founding affidavit, Mr Subramoney said that it had been the unlawful
conduct of, amongst others, Sasol, who had caused the downfall of the company.
The company's collapse in late 2023 was entirely caused by external factors,
"specifically a catastrophic supply disruption" from Sasol. The supply shock was not
32 Paragraph 39 at page 9(7).
24
due to "management failure, operational inefficiency or market rejection" of the
company's business model.
[83] In June 2025, the company issued summons against Sasol for payment of
R 1.2 billion, which claim arises from Sa sol's breach of supply agreements. It suffices
to say that the company had not, as one would have expected, applied in 2023 to the
urgent court for any relief to compel Sasol to comply with the agreement. There is no
explanation why an urgent application had not been lodged.
(84] Sasol denied any unlawful conduct or that ii had caused the company's
collapse. Sasol says the company's claim lacks merit.
[85] In July 2025, the company issued summons against SBSA for payment of
R246 million. The cause of action is SBSA's unlawful withdrawal of credit facilities
during a critical operational period. Mr Subramoney's counsel argued that the Sasol
supply crisis and SBSA's unlawful actions occurred one after the other.
[86] I have alluded to the fact that Mr Subramoney had ceded the company's
debtor's book to SBSA and FRB. The bank customer is suing the bank for cancelling
the customer's credit facility, which the customer had obtained by offering the same
asset to two different creditors, one of which is the bank it is suing. The irony has not
escaped me.
[87] In their answer, FRB offers a reason, although not in so many words, for the
company's financial distress. FRB said that the company had ceded its debtor's book
to multiple creditors, which include FRB, Sasol, SBSA, Hollard, Mutual and Federal,
Genfin and Investec Bank.33
(88] Mr Subramoney has not denied the multiple cessions but argues that these
allegations are directed at the company's management practices and insists that
"these irregularities" be investigated by a business rescue practitioner. Yet, in his
33 At page 20(173).
25
founding affidavit he had said, in direct contradiction, that the company's collapse
was not due to management failures.
[89] Mr Subramoney admitted that the company's debtor's book was ceded to
FRB and SBSA.34
[90] The fact that the company ceded its debtor's book to more than one creditor,
the employees said,35 "may raise legal questions, but does not render the conduct of
the business unlawful, and any such questions can be resolved by the practitioner".
[91] Mr Subramoney stated36 that the company's creditors are SBSA (R107
million), FRB (R60 million), Hollard (R65 million), Genfin (R5.5 million), and Merchant
West (R1 million).37 (Four of these creditors hold cessions over the company's
debtor's book, as set out in FRB's answering affidavit)
[92] Since September 2024, FRB said, it had, with the assistance of other
creditors, attempted to collect the company's debtor's book. FRB managed to collect
only R450 000, underlining the improbability of successfully recovering the
company's debtor's book.
[93] The size of the company's debtor's book, the difficulty collecting the debt, and
the need to offer the same asset to multiple creditors underscore the real reasons for
the company's financial distress: unlawful borrowing and borrowing more than the
income it generates. Mr Subramoney and the employees have not honestly
explained the causes of the company's financial distress.
The company's liabilities
34 At page 17(10).
35 In their replying affidavit
36 In his reply to FRB.
37 At page 21(25).
26
[94] In their founding papers, the employees said they had "been told" by an
unidentified person that the company had only one creditor, SBSA. At that stage,
according to the employees, the company owed SBSA only R 103 million. 38
[95] The employees also said that the company's debtors totalled R363 million,
which can be recovered in full since the debtors are in the coal supply and transport
business which "had a downturn between September 2023 and April 2024" but were
steadily returning to previous profitable levels. This further contradiction regarding
the cause of the company's collapse has not gone unnoticed.
[96] The employees attached a business rescue practitioner's report to their
application, which report attached a list of creditors. The total creditors, as per the
list, amounted to R558 million and included SBSA as well as eight other creditors.
SBSA's debt is recorded as R 153 million, and not R 103 million as alleged by the
employees. The list of creditors materially contradicts, in the same set of papers, the
employees' allegation that SBSA had been the company's sole creditor. The
employees have not explained the discrepancy.
[97] The employees later said39 that the company disputes the creditors' claims on
reasonable grounds. SBSA's claim is R107 million, not R178 million, and that of
Sasol has been reduced by R145 million due to payments by guarantors and
insurers. FRB's claim was overstated. The employees also said40 that FRB's
application is driven by self-interest because it is a secured creditor holding cession
of the company's debtor's book. FRB's opposition is motivated by the desire to avoid
its obligation, as a secured creditor, to account for the recoveries made from the
debtor's book ceded to it. FRB has neither the incentive nor the mandate to
maximise recoveries for the general body of creditors. FRB's failure to provide any
accounting of the debts recovered suggests that FRB may have recovered
substantial amounts.
38 Paragraph 52 at page 9(10).
substantial amounts.
38 Paragraph 52 at page 9(10).
39 In their supplementary affidavit.
40 In their replying affidavit.
27
[98] Under the heading "Creditor breakdown,"41 the employees listed the priority
creditors, identified as FRB and SBSA, at R180 million, whilst the supportive
creditors, Hollard, Credit Guarantee, Omart, Daimler FS, ICT, Coface and others are
at R270 million. According to the employees, the company's total creditors in
October 2025 were R550 million.
[99] I have earlier alluded to Merchant West's belated intervention application.
Merchant West's counsel informed me that Merchant West's claim was R27 million.
In his replying affidavit to FRB's answer, filed in January 2026, Mr Subramoney
alleged that the company owed Merchant West R1 million.42 If I consider that FRB
stated Merchant West's claim as R30 million, then at first glance, it appears that
Mr Subramoney has substantially understated Merchant West's claim or, if he is to
be believed, that the company had made a substantial payment to Merchant West, in
which event Merchant West's claim of R27 million could not be correct.
[100] Mr Subramoney alleged43 that Sasol issued summons against the company
for payment of R86 million, only to withdraw the ensuing summary judgment
application, thereby acknowledging the merits of the company's defence. He alleged
that Sasol's claim has been paid in full.
[101] In its response, Sasol explained that it had not pursued the summary
judgment application because at the time it believed that it was precluded from
obtaining judgment because of the moratorium on legal proceedings during business
rescue proceedings. The summary judgment application was set down for 11 August
2025. On that morning, the company filed an affidavit resisting summary judgment,
causing the application for summary judgment to be postponed. The decision to not
persist with the summary judgment application, says Sasol, is irrelevant to the merits
of its claim against the company.
41 In their second business rescue plan.
42 At page 21(25).
43 In his founding affidavit.
28
[102] Sasol said it had received payment of R50 million from Hollard, R35 million
from Credit Guarantee, and a further R60 million from Mutual Federal. After these
payments, the balance due to Sasol is R85 million.
[103) I want to make it clear that I make no finding regarding the company's
indebtedness to the liquidation supporters, since that issue is contested and will be
dealt with when the liquidation applications are considered.
The company's assets
[104) The employees stated44 that the "obstructionist conduct of the banks" was
likely to promote "a fire sale of assets in liquidation to the disadvantage of all affected
parties". This response suggested that the company had realisable assets. Later,
they said45 that the company held no assets in its own name. The only substantial
asset was the shares it held in its sister company, which had been liquidated. The
sister company's liquidation will yield a dividend of less than one cent per Rand. The
fire sale of assets the employees predicted in the supplementary affidavit appears to
be a non-starter.
[105) Mr Subramoney stated that the company had an active debtor's book of
R205 million which had been ceded to FRB and SBSA.46 In the same affidavit, he
said the debtor's book was R380 million.47 Notwithstanding the request, neither FRB
nor SBSA had provided him with accounting regarding recoveries of the debtor's
books. He complained that the failure to disclose the figures demonstrates
"concerning intent and prejudice" to the company's ability to accurately determine its
true financial position. He estimated, without substantiating, that approximately R100
million should have been recovered over the last 18 months. He did not explain why
he had not contacted the debtors to reconcile the outstanding debtor's book, as a
concerned director would have done.
44 In their supplementary affidavit.
45 In their replying affidavit.
46 At page 17(1 0).
47 At pages 17(10) and 17(38).
29
The company's current income
[106] The employees said48 that the management accounts reflect that the
company's turnover for the 9 months from October 2025 to June 2026 was
R448 million. The net profit, after overheads, for these 9 months was approximately
R14 million. The results, the employees submit, "supersede the earlier monthly
projections and place the reasonable prospect beyond conjecture".
[107] In most people's books, R14 million is a lot of money, but it requires a closer
look. However, according to my calculations, if the net profit is used to repay debt of,
for example, R140 million, it would take the company 10 years to repay, and that
does not account for interest.
The employees' first business rescue plan
[108) The employees' first business rescue plan emanates from their founding
affidavit. The employees stated that there were "reasonable prospects that [SBSA]
will be fully paid as the company had been able to secure post-commencement
funding of R5 million from an unidentified funder despite the winding-up application".
[109) The employees indicated that they had consulted with a business rescue
practitioner who, on the strength of an unexplained preliminary enquiry into the
company's affairs, was satisfied that the company can be rescued. Annexure B to
the employees' founding papers is the business rescue practitioner's report.
[110) The business rescue practitioner estimated fuel sales of R170 million for the
next year and gas sales of R?.9 million for that period. These add up to a rounded
off amount of R180 million. The business rescue practitioner estimates a profit
margin of between 7% and 10%. If I apply a liberal profit margin of 10% to the
rounded-off R 180 million, the estimated profit is R18 million per year.
48 In their replying affidavit.
30
[111] The employees said that a business rescue order would be just and equitable
because the (then) current fuel and gas sales would enable the company to return to
a favourable financial position "to pay its only creditor, [SBSA]." Liquidation would be
of little to no financial benefit as the company's "value remains in it continuing to
trade in fuel and gas."
[112] The employees' first business rescue plan cannot be taken seriously because,
according to them, the company had only one creditor at the time, SBSA.
The employees' second business rescue plan
[113] The employees published their second business rescue plan in their
supplementary affidavit, at the same time that Mr Subramoney had published his
business rescue plan. Therein they said that the company's rescue will involve four
primary phases: salary restructuring, asset rationalisation, market recovery and
depot consolidation. These measures have apparently already produced measurable
financial improvements. All employees have, since August 2024, voluntarily
accepted a reduction in salary. Financial data supports this progress, the employees
said. Turnover increased from approximately R6 million in June 2025 to
approximately R22 million by August 2025.
[114] The plan also envisages that the company will expand through a franchise
model which will by 2028 create 2000 jobs.
[115] Under the heading "Funding requirements (Lean Model)", the plan explains
that the company requires external funding of R50 million to restart and restructure.
R25 million is required for working capital, R20 million for retail expansion and
R5 million for a contingency buffer.
[116] The employees' second business rescue plan requires R50 million for it to be
successful. This is significantly more than the R5 million it initially thought would
suffice.
31
Mr Subramoney's business rescue plan
[117] Mr Subramoney published his business rescue plan together with his
business rescue application. He stated that his intervention was necessary to
present a comprehensive business rescue plan in line with the transformative
developments, securing R100 million in post-commencement funds and a 1 0 million
litre monthly fuel supply contract.
[118] The purpose of his application was to present to the court a comprehensive
body of evidence of "not merely a reasonable prospect of rescue, but a near
certainty of successful rehabilitation based on secured funding and contracted
revenue that transforms the company's position".
[119] Since the filing of the employees' application, fundamental changes have
occurred as the company has secured R100 million in post-commencement funding,
which represents one of the largest facilities in the country's business rescue history.
The monthly fuel supply contract, which would commence in November 2025, would
generate nearly R 11 million in gross profit. These developments transform the
business rescue from "a hopeful recovery to a funded certainty".
[120] He referred to the company's performance for the June to August 2025
period. According to him, the company's total gross profit during this period was R42
million. The preliminary figures for September 2025, he said, showed a turnover
accelerating to R35 million "following the R100 million funding announcement". He
predicted that the turnover for March 2026 would be R100 million.49
[121] Regarding the R 100 million facility, Mr Subramoney said it has been
structured to optimise capital deployment with R30 million allocated to working
capital, R30 million for retail expansion, R15 million for technology and systems
implementation, R10 million for strategic inventory and R5 million as a contingency
buffer.
49 At page 17(14).
32
[122] The funds were secured through intensive engagement with (unidentified)
sophisticated financial institutions and (unidentified) creditors, who conducted
thorough due diligence and who concluded that the company "represents a
compelling recovery opportunity". The R100 million will be leveraged to "achieve
rapid market capture rather than gradual recovery".
[123] He said that in business rescue, FRB and SBSA will receive 120% of their
R180 million debt within 18 months, making business rescue a better option than
liquidation. If Mr Subramoney is to be believed, he is fighting for a better return for
the liquidation supporters, but they seem to be fighting for a smaller return.
[124] The company's claims against Sasol and SBSA had been thoroughly vetted
by (unidentified) legal counsel with "extensive discovery completed". The probability
of recovery from Sasol is 40% and from SBSA 30%. I am no statistician, but if a
plaintiff has a 40% or 30% chance of winning a case, the plaintiff's risk of losing is
60% or 70% respectively.
[125] Mr Subramoney stated that management has made substantial personal
sacrifices despite overwhelming challenges and that all management personnel
voluntarily accepted a 40% salary reduction. He said he had provided personal
suretyships and guarantees totalling millions of Rand. The exceptional growth of the
company proved management's capabilities. In my view, if growth proves capability,
then, surely, unpaid debts of millions of Rands prove incapability.
[126] Mr Subramoney said the window of opportunity is clear: the company has
R100 million to deploy; its competitors lack working capital; they are retrenching
whilst the company is hiring and expanding; competitors are losing market share;
and the company has secured a major anchor contract.
[127] Elsewhere in the plan, he said that the "September 2025 preliminary results
following the R100 million funding injection show turnover of R35 million with
following the R100 million funding injection show turnover of R35 million with
margins of 6,50% generating R2,275,000 gross profit". In the last paragraph of his
affidavit, he says that the "funding is deployed". Here the funding has already been
33
deployed, whilst earlier he alleged that the funding would be deployed (when
received).
[128) He also attached the fuel contract and a letter50 from 27 Four Capital
Partners. In the letter it is stated that the company's previous funding application had
not been approved but that the funders now wish to confirm their keen interest in
funding the company to a maximum capital amount of R 100 million on terms and
conditions to be agreed upon and determined in conjunction with the appointed
business rescue practitioner and after conclusion of a due diligence on the
company's dispute with Sasol and SBSA. The funding was conditional upon the
funders being comfortable, in their sole and unfettered discretion, that nothing
related to the disputes shall interfere with the funders' rights against the company.
The outcome of the funding application is subject to the funders concluding a due
diligence on the proposed business rescue plan and the funders' investment
committee's approval.
[129) The funders made it clear that their letter was intended for the company, that
it shall remain confidential, and that no person other than the company shall be
entitled to rely on this letter against the funders. This letter is at best a promise, not
under oath, that subject to multiple conditions, an investment committee will consider
the request for funding. It is by no means confirmation of approved funding.
[130) In its answer, FRB stated that it had considered the proposed business
rescue plan and had concluded that it would vote against it. In Oakdene,51 the court
said that:
"If the majority creditors declare that they will oppose any business rescue scheme
based on those grounds, I see no reason why that proclaimed opposition should be
ignored. Unless, of course, that attitude can be said to be unreasonable or mala fide.
By virtue of s 132(2)(c)(i) read with s 152 of the Act, rejection of the proposed rescue
plan by the majority of creditors will normally sound the death knell of the
plan by the majority of creditors will normally sound the death knell of the
proceedings. It is true that such rejection can be revisited by the court in terms of s
50 At page 18(43).
51 Oakdene, fn 27 at para 38.
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153. But that, of course, will take time and attract further costs. Moreover, the court is
unlikely to interfere with the creditors' decision unless their attitude was
unreasonable."
[131] Mr Subramoney's business rescue plan is self-destructing. One moment the
company is promised R100 million, the next moment the R100 million has already
been injected. But if the R100 million has not been paid, what Mr Subramoney
effectively asks for is a court-sanctioned loan and a court-sanctioned moratorium on
existing creditor claims.
The employees' future
[132] Liquidation would result, the employees said, in significant loss of employment
which would impact the employees and their dependants. In their supplementary
affidavit, the employees indicated that all employees had, since August 2024,
voluntarily accepted a reduction in salary. The employees' loyalty to work without full
salary and willingness to endure hardship underscores their confidence that the
company can be rescued.
[133] Business rescue would devastate approximately 30 employees and hundreds
of indirect workers and dependents, and the socio-economic consequences for the
Emalahleni region would be severe. Each employee supports on average six
dependents. The type of work employees do is not readily available in the open
market.
[134] The employees said52 they were ordinary working people, depending entirely
on their salaries for their families' livelihoods. The employees fund the litigation by
pooling their limited resources whilst experiencing significant financial difficulties due
to agreed salary reductions.
[135] At the hearing, I pointed out to the employees' counsel that I found it difficult
to understand how a company that generated R14 million net profit in 9 months
52 In their replying affidavit.
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could still expect its employees to work at reduced salaries. He responded that the
employees agreed to return to normal salary once the business has been rescued.
Liquidation versus business rescue
[136] FRB's counsel argued that business rescue proceedings are notorious for the
inordinate amount of litigation it generates, resulting in unreasonable delays.
Mr Subramoney's counsel argued that, although there are often delays, legislation
compels business rescue proceedings to be finalised in about six weeks. In Oakdene
(court a quo),53 the court held that business rescue proceedings are "open-ended,
and could probably include further applications to court and carry on for a
considerable period of time."
[137] I considered the impact of the lapse of time since lodging of the liquidation
applications. Could it be argued that the two years that have lapsed suffice as proof
that the company can be rescued? I concluded that the answer is no, because
during this period, no creditor had been paid. The company was for the past two
years basically stuck in neutral space between liquidation and business rescue. The
creditors too.
[138] Section 129 affords the company the option to lodge a business rescue
application, but before any liquidation proceedings have been initiated. The rationale
is obvious: The company's board will always be the first to sense that the company is
in financial distress. Section 129 affords the board the opportunity, but at the same
time, a built-in warning that the option is not indefinitely open.
[139] Mr Subramoney has not explained why he had not considered business
rescue soon after what he terms a catastrophic fuel supply crisis. His application was
indeed triggered by the liquidation applications. If he firmly believed that the
53 Oakdene Square Properties (Pty) Ltd and Others v Farm Bothasfontein (Kyalami) (Pty) Ltd and
Others, Farm Bothasfontein (Kyalami) (Ply) Ltd v Kya/ami Events and Exhibitions (Ply) Ltd and Others
[2012) ZAGPJHC 12; 2012 (3) SA 273 (GSJ); [2012) 2 All SA 433 (GSJ) at para 49.6.
36
company could be rescued, surely he would have brought that application before any
liquidation application?
The fate of the employees
[140] The fate of the employees is the only fact that supports an order to place the
company under business rescue supervision, but on its own, it is unfortunately not
enough to sustain that order. The company's employees are directly affected, but
one should not forget that the creditors' employees also rely on their companies to
collect the debt due to the creditors. The creditors' employees are indirectly affected.
Which application to dismiss?
[141] I will, for the present, given my conclusion, accept that section 131 envisages
more than one business rescue application. I will therefore dismiss both applications
for the reasons evident from this judgment.
Costs
[142] It is trite that the cost order follows the result. I do not see any reason to
deviate from this principle. There are, however, other considerations.
[143] The employees have, on their version, pooled their salaries to come to the
assistance of the company of which Mr Subramoney is the sole beneficial owner. It
would, in my view, be fair to order that Mr Subramoney pay their costs.
[144] Given Mr Subramoney's delaying strategy, to which I have alluded, a punitive
cost order is warranted to show the court's disapproval. For the taxing master's
benefit, I confirm that had I not ordered a punitive cost order, I would have ordered
costs on high court party and party scale C.
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[145] I make no cost order against Merchant West, because of my finding that they
served the ultimate interests of Mr Subramoney. If not for that, I would have ordered
Merchant West to pay costs on a punitive scale, because its intervention application
took up much of the court's time on 21 July 2026 and contributed to the parties only
dealing with the business rescue applications and not the liquidation applications.
Conclusion
[146] The business rescue application's eloquence outweighs its substance. To
borrow from the title of an opening address given by Professor Mongalo: "To place
the company under business rescue would be one step forward but two steps
back".54
Order
[147] The following order is made:
1 Mr Subramoney is granted leave to intervene in the employees' business
rescue application under case number 1476/2024.
2 It is confirmed that the matters were consolidated by order of the Judge
President on 13 February 2025, alternatively by Msibi AJ on 7 October 2025.
3 The application by Merchant West to intervene is dismissed.
4 The late filing by the employees of their replying affidavit in their application to
place SFT Energy (Ply} Ltd under business rescue supervision is condoned.
5 The application by the employees of SFT Energy (Pty) Ltd to place SFT
Energy (Pty) under business rescue supervision is dismissed.
54 TH Mongalo, 2014; Two steps forward and one step back is better than one step forward and two
steps back: A limited comparative analysis of business rescue in South Africa.
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6 The application by Mr Subramoney to place SFT Energy (Ply) Ltd under
business rescue supervision is dismissed.
7 Mr Subramoney, in his personal capacity, is ordered to pay the costs of those
parties opposing his application to place SFT Energy (Ply) Ltd under business
rescue supervision, on an attorney and client scale. The costs to include the costs of
two counsel, where so employed.
8 Mr Subramoney, in his personal capacity, is ordered to pay the costs of those
parties opposing the employees' application to place SFT Energy (Ply) Ltd under
business rescue supervision, on an attorney and client scale. The costs to include
the costs of two counsel, where so employed.
9 Mr Subramoney, in his personal capacity, is ordered to pay the costs of the
employees in their application to place SFT Energy (Pty) Ltd under business rescue
supervision, on an attorney and client scale. The costs to include the costs of two
counsel, where so employed.
1 0 The determination of placing SFT Energy (Ply) Ltd in liquidation in terms of
section 131(1)(4)(b) of the Companies Act 71 of 2008 is postponed to a date to be
determined as set out below.
11 The liquidation applications of First Rand Bank Ltd and Standard Bank of
South Africa Ltd, and Sasol Oil (Pty) Ltd (Sasol) are postponed to a date to be
determined as set out below.
12 The attorneys of the parties to the consolidated matter are ordered to,
amongst themselves and within ten days from this order, complete and file a Form B.
13 The attorneys of First Rand Bank Ltd are ordered to enrol the matter within 15
days of this order.
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14 Should any party fail or refuse to co-operate in complying with the orders
relating to the determination of the date of hearing or the completion of Form B, any
other party may approach the registrar for enrolment of the matter for judicial case
management by this court.
15 The date of hearing is to be arranged in conjunction with this court's
secretary.
16 The parties are invited to file supplementary heads of argument by no later
than 15 September 2026, strictly dealing with (a) whether a liquidation order in terms
of section 131(1)(4)(b) of the Companies Act 71 of 2008 may be granted whilst a
business rescue application is pending, and (b) whether section 131 envisages more
than one business rescue application.
SCHUTTEAJ
ACTING JUDGE OF THE HIGH COURT
MPUMALANGA DIVISION, MIDDELBURG
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Appearances
For First Rand Bank Adv Vorster SC
Adv de Oliveira
For SFT Energy Adv van Rensburg SC
Adv Sullivan
Adv de Beer
For the employees Adv Mtsweni
For Mr Subramoney Adv de Leeuw
ForSACWU Adv Mathupana
For Sasol Adv Goertzen
For Standard Bank Adv Goertzen
For Merchant West Adv Broodryk
Date heard: 21 July 2026
Judgment delivered: 24 August 2026
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