FINAL EXIT: A bitter pill — SAPS probe clouds delisted Tongaat Hulett’s rescue deal

Another one bit the dust this month. By that, we mean the JSE lost another listing, as troubled Tongaat Hulett finally exited trading on 3 November – four years after it entered business rescue, and seven years after the accounting scandal that lit the fuse was unearthed. But that is not all that’s going on. A closed briefing on 23 October has sparked reports that KZN Police Commissioner Lieutenant General Nhlanhla Mkhwanazi is leading a probe into the company’s sale. For now, suggestions of impropriety remain speculative, but they could further complicate the woebegone sugar firm’s future – and its past is more than complicated enough as it is. Where Tongaat Hulett standsDeep breath. This is a (brief) rundown of what has transpired so far.In 2019, while we all enjoyed blissful ignorance of Covid’s existence, forensic accountants were digging through Tongaat Hulett’s financial statements, only to find “undesirable accounting practices” and “governance failures” which left an R11-billion hole. The company was forced to approach several banks (the lender group) to handle the debt, but failed to get it under control. Then Zimbabwe’s Rudland family entered the picture, eyeing a buyout, only for regulators to shoot down the contested deal. The lender group rejected a proposal to cut debt by selling the non-South African part of the sugar business, landing Tongaat Hulett in business rescue (BR) in October 2022. The process chugged along at BR’s typically leisurely pace until January 2024, when creditors approved a BR plan through which the Vision consortium, led by Robert Gumede and Rute Moyo, would take over Tongaat Hulett by acquiring its debt. Robert Gumede, whose Vision consortium had its Tongaat Hulett rescue plan approved in 2024. (Photo: Kevin Sutherland / Gallo Images / Sunday Times)In May 2025, Tongaat Hulett confirmed that the lender group had received the balance owed by Vision Investments 155, Vision’s acquisition vehicle. A rival bidder, RGS Group, has alleged that Vision made “false” representations to creditors, which Vision firmly denies. Speaking to BizNews, analyst Dave Woollam raised concerns about the manner in which Vision took the wheel. For more on this, including Vision’s response, see amaBhungane’s reporting. Vision told Daily Maverick the acquisition “was established through a public, judicially supervised business rescue process voted for by creditors, and is underpinned by binding agreements with key institutions, including the Industrial Development Corporation (IDC)”.The IDC is the state-owned body that has provided funding to Tongaat Hulett to help pay the sugar cane workers whose livelihoods are at stake because of this mess.However, in February, the BR plan crumbled after Vision and the IDC could not agree on financing arrangements, and Vision made additional demands for industry reform that were not part of the original BR plan. Tongaat Hulett’s sale agreements with Vision lapsed and Vision demanded full debt repayment. That same month, the BR practitioners applied for the provisional liquidation of Tongaat Hulett. The IDC, Department of Trade, Industry and Competition and South African Canegrowers Association all opposed liquidation. In June, the BR practitioners withdrew the liquidation application after the IDC agreed to an extension of funding and debt-to-equity conversion. Funding was extended until the end of September, and then once again, until the end of this month. The conversion sees the IDC becoming a partial shareholder in Tongaat Hulett South Africa, and in Vision Sugar’s operations in Zimbabwe, Mozambique and Botswana.According to Vision, this means “the state and private capital work hand-in-hand to protect regional food security and manufacturing capacity”. Labourers at a Tongaat Hulett production line in Triangle, 400km south of Harare, Zimbabwe. (Photo: Aaron Ufumeli / EPA) Turning over a new leafOn 23 October, Commissioner Mkhwanazi convened a meeting to discuss “an investigation relating to the transaction between Vision Sugar and the acquisition of the lender group claims”, the joint BR practitioners of Tongaat Hulett told Daily Maverick. Vision was not invited – neither were journalists – but Tongaat Hulett, the IDC, the South African Canegrowers Association, the South African Sugar Association (Sasa) and members of the Zulu Royal Household were. Lieutenant General Nhlanhla Mkhwanazi. (Photo: Brenton Geach / Gallo Images) South African Police Service (SAPS) spokesperson Colonel Robert Netshiunda confirmed that the meeting took place, but was not at liberty to share details. If the SAPS were to comment at some stage, he expects it to be on a national rather than a provincial level. SAPS has not publicly disclosed who raised complaints about the deal, but media reports trace them to the Royal House. Prince Mpiyakhe Buthelezi, spokesperson for King Misuzulu kaZwelithini, denied knowledge of the particulars when contacted by Daily Maverick. Vision told us: “From informal feedback received concerning the discussions, Vision understands that it may be regarded as the subject of the complaint. However, it has received no formal notification or communication to that effect.”The company said it had learned of the reported investigation through third parties, but not directly from law enforcement officials, noting that it had not been contacted by the SAPS or the Directorate for Priority Crime Investigation (Hawks). “No person or entity within the Vision Group has been formally identified by the investigating authorities as a suspect, person of interest, or witness,” it continued.“Vision operates under the highest standards of corporate governance. While the consortium was not involved in the 23 October briefing, our leadership maintains full respect for constitutional bodies, law enforcement, and traditional authorities. Should SAPS, the Hawks, or any regulatory body formally request information or engagement, Vision’s leadership will immediately make itself available to cooperate.”Tongaat Hulett said it was not in a position to comment, “as the parties being investigated are Vision Sugar and the lender group”.Broader impactWhat happens to Tongaat Hulett matters because it is the backbone of northern KZN’s rural economy, and if it goes down because a few executives cooked the books – or for any other reason – it takes many innocent people’s sources of income with it.According to Sasa, “At least one million livelihoods are dependent on sugarcane growing and milling activities. Furthermore, we create 65,000 direct and 270,000 indirect jobs.” The sector is already under pressure as a result of the Health Promotion Levy (aka sugar tax) introduced in 2018, with SA Canegrowers labelling as “disingenuous” suggestions that the tax has not affected jobs. Sugar imports, plus “customer hesitancy and supply-side constraints”, according to Tongaat Hulett, are causing strain. A strike in August and September also hit production. In its latest BR status update, Tongaat Hulett flagged a delay to the transfer of its South African business to Vision, which should have gone through at the beginning of this month.A sugar cane plantation in Port Shepstone, KZN. (Photo: Gallo)Combined with “structural market pressures”, this has delayed payments that were due to sugar cane growers at the end of October. The company is waiting to hear whether the IDC will increase funding, but noted: “Good progress has been made towards a settlement with Sasa.”The IDC confirmed that it had received “correspondence from the KwaZulu-Natal police commissioner requesting that the proposed Vision transaction be placed on hold pending an investigation into allegations concerning Tongaat Hulett’s business rescue process”. However, the IDC stressed that it did not want to create any uncertainty among sugar cane workers and that it intended to honour its commitments under the BR plan. It said the SAPS notice did not instruct the IDC “to halt payments” to Tongaat Hulett and that it “remains mindful of its responsibility to safeguard public funds, support business continuity and protect livelihoods”.“The IDC will not comment on the allegations while the investigation is ongoing,” it added.Higgins Mdluli, chair of SA Canegrowers, told Daily Maverick: “SA Canegrowers and other sugar industry members have received no further communication from SAPS since the October 23 meeting and are therefore not in a position to comment further.” Sasa’s executive director, Sifiso Mhlaba, said: “We remain optimistic that the operationalisation of the approved business rescue plan will yield positive results.”Vision said the deal “is progressing through its standard final regulatory and administrative clearances” and underscored its efforts to preserve jobs in the sugar cane industry: “Vision’s focus remains on completing the transaction.”Basically, everyone is keen to tell us small-scale farmers and growers will be fine. We sincerely hope they mean it. DM