RGS Group Holdings, who are the subject of a criminal investigation by the Directorate for Priority Crime Investigation (DPCI), has surfaced again in the battle for the control of Tongaat Hulett.
RGS withdrew from the bidding process on January 9, 2024 after it became apparent that they submitted a fraudulent proof of funding letter on an Absa Mozambique letterhead to the financial institutions, the lender group, the business rescue practitioners and their competitor in the process, Vision Investment 155, headed by Robert Gumede and Rute Moyo.
RGS’s executive chairperson and founder, Momade Acquil Rajahussein, later in court proceedings admitted that the letter in question was fraudulent but deflected and stated that a “junior manager of RGS committed the fraud” by creating and circulating a false R2 billion proof of funding letter in collaboration with ABSA Mozambique.
ABSA South Africa discovered the fraud and informed the affected parties. RGS had no option but to admit to the transgression. RGS then withdrew from the process but later resurfaced in an intervention application, this time boldly admitting to the fraud.
On June 22 2024, Kobus Laubscher of Business Times wrote that an undisclosed, interested party had proposed a R8bn capital injection to be used to settle the claims of the creditors and called the Vision plan, that was approved by the business rescue practitioners, predatory.
Laubscher failed to provide the name of the undisclosed interested party, the conditions proposed by the interested party and whether proof of funding or cash in escrow have been provided. The Star can disclose that this undisclosed interested party is none other than the fraud accused RGS, who confessed to providing a fraudulent letter of funding previously.
Werksmans Attorneys, acting for the business rescue practitioners, rejected the proposal by RGS on behalf of the business rescue practitioners.
Gumede responded to questions by The Star and stated that the legal process is well under way for Vision to take control of Tongaat Hulett and that the process needs to be followed and respected.
“Let’s leave it to the shareholders, the business rescue practitioners and the lender group to follow the process and lets respect the process,” said Gumede.
Moyo, who lodged the criminal complaint, indicated that he was overwhelmed by the pace of the investigation by the DPCI and insisted that the investigation must be completed. ”I am comfortable to comment once the accused have appeared in court,” he said.
In December 2023, amaBhungane’s Sam Sole wrote that the Gulamo family, who owns RGS, was linked to the drug trade by a Wikileaks dump of the US embassy cables.
Acquil Rajahussen was also implicated in an alleged money laundering scheme on behalf of a former Minister of Mines and Geology for the Republic of Guinea, Mahmoud Thiam. Thiam was sentenced in the US to seven years’ imprisonment for laundering bribes paid to him by Chinese companies. Rajahussen and the Gulamo family have denied any wrongdoing.
On August 8 2024, the Tongaat shareholders will vote at a general meeting called by the business rescue practitioners to adopt the Vision plan. “RGS and their cohorts are trying their best to scutter the acceptance of the Vision plan to give RGS another chance to take control of Tongaat. The very livelihood of thousands of small-scale farmers is at risk if the Vision plan is not accepted by the shareholders,” a senior employee of the IDC said to The Star on the basis of anonymity.
At the time of the publication, the legal representatives of RGS, White & Case, failed to respond and comment to questions sent to them since last week, where The Star requested them to disclose the identity of the fraudster employed by RGS, whether RGS complied with their statutory duty to report the fraud, and who the funders behind RGS are.
The Star shared the names of two South African businessmen with White & Case as the alleged funders, but no comment was forthcoming.