And it is now due, following ConCourt's dismissal of BRP's appeal of SCA judgment.
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Tongaat Hulett’s business rescue practitioners (BRPs) are facing a claim for R517 million against the JSE-listed financially distressed sugar and property group for outstanding statutory sugar industry levies (trading in its shares remains suspended on the JSE).
This follows Tongaat’s BRPs unsuccessful attempt to allow the group to legally suspend payment of the levies while it is in business rescue.
The Constitutional Court on Monday dismissed with costs an application by Tongaat’s BRPs to appeal the dismissal by the Supreme Court of Appeal (SCA) in December 2025 of its application for a declaratory order that would allow a BRP to temporarily suspend a company’s payment obligations under pre-existing agreements during rescue proceedings.
The ConCourt ruled that “there are no reasonable prospects of success on the merits of the application for leave to appeal”.
“Therefore leave to appeal must be refused with costs,” it said.
Tongaat’s joint BRPs said on Thursday they are currently engaging with their counsel and relevant stakeholders to consider the implications and impact of the ConCourt judgment on the business rescue process, if any.
“It would therefore be premature to comment on any payment implications, quantum or timing at this stage,” they said.
Statutory levies not paid
Sugar Association of South Africa (Sasa) executive director Sifiso Mhlaba said on Thursday the association is owed R517 million by Tongaat in outstanding statutory sugar industry levies.
Mhlaba said Sasa is awaiting legal advice on when these outstanding levies must be paid but they should be paid in line with the approved Tongaat business rescue plan.
He said Sasa recovered a portion of the R1.5 billion that was owed at end-March 2023 and confirmed that Tongaat has been paying industry levies since 1 April 2023.
Mhlaba said the non-payment of levies to Sasa by Tongaat had an impact on the sugar industry and cane growers in that a special levy was raised to settle the banks and others.
“The special levy was borne by all growers and millers, who remain out of pocket,” he said.
BRPs’ stance
Tongaat’s BRPs said the ConCourt proceedings relate to the BRPs’ decision to temporarily suspend certain payment obligations to Sasa under the Sugar Industry Agreement for the period 28 October 2022 to 1 April 2023.
They added that the temporary suspension of payments was critical to ensure the success of the business rescue process in ensuring Tongaat’s sugar operations survival over the longer-term, which is crucial for the sustainability of the sugar industry in KwaZulu-Natal.
“If these payments had been made at that time, there was a strong possibility of the company running out of funds and being forced to go into liquidation,” they said.
The BRPs stressed that payments to Sasa have been made since April 2023 and, importantly, cane growers have been paid all amounts owing to them since the commencement of the business rescue process.
At issue
The main issue in the SCA application was whether the Sugar Industry Agreement, promulgated in terms of the Sugar Act, qualifies as an “agreement” under a section of the Companies Act, thereby permitting the suspension of payment obligations owed under it while business rescue is in progress.
The SCA appeal followed the High Court in Durban in December 2023 dismissing with costs the BRPs’ application for an order declaring that a section of the Companies Act, read with the definition of “agreement”, empowers the BRPs to suspend any of Tongaat’s payment obligations that arise under the Sugar Industry Agreement.
The SCA judgment said Tongaat stopped making payments required under the Sugar Industry Agreement from September 2022, triggering a dispute about whether such payments could legally be withheld during business rescue.
It said Sasa expressed concern that non-payment by Tongaat could have far-reaching impacts on the broader industry, including the financial health of other millers and growers.
The SCA said by January 2023 Tongaat indicated it was unable to meet impending obligations for redistributions, interest, and levies but Sasa insisted that these commitments remained enforceable.
In response to Tongaat’s non-payment, Sasa withheld export proceeds that would otherwise have been due to Tongaat.
The SCA said Sasa then demanded payment of more than R176 million in industry levies but Tongaat confirmed it was suspending these payments in reliance on a section of the Companies Act.
Pressure
The SCA added that this impasse increased financial pressure on both Tongaat and the wider industry, raising concerns about ongoing support for rural employment and the stability of sector-wide revenue sharing.
However, the SCA said that as of 31 March 2023, the exact amounts owed by Tongaat remained contested but they are considered immaterial to the immediate dispute and the BRPs announced that payments for new obligations would resume from April 2023 while historical debts would be addressed through the business rescue plan.
The SCA said Tongaat began repaying current charges and levies from April 2023 but most debts predating this period remained outstanding, continuing to pose risks for suppliers, employees, and industry partners.
It added that the BRPs on 31 May 2023 published a business rescue plan that did not make provision for payment of any outstanding industry levies or redistribution payments under the Sugar Industry Agreement and instead classified these obligations as unsecured debt.
This placed Sasa in the position of an unsecured creditor and suspended the debt pending confirmation by the high court.
RGS matter
The BRPs on Thursday also announced that, in an unrelated matter to the Constitutional Court judgment, RGS Group Holdings Limited on 20 August 2026 filed an appeal against the 24 July 2026 judgment of the High Court in Durban to its counter-application against the BRPs and Vision Investments 155 (Pty) Limited.
RGS’s counter-application was seeking, among other relief, to set aside Tongaat’s business rescue plan that was approved and adopted by creditors on 11 January 2024.
The court dismissed RGS’s counter-application with costs after agreeing with claims by the Vision Group and the BRPs that the November 2024 application was between the same parties and RGS sought substantially the same relief in this counter-application, which remains pending in the November 2024 application.
The BRPs said the application for leave to appeal will be opposed but a date for the hearing of the application has not yet been allocated by the registrar.
“Pending determination of the application for leave to appeal, and of any further appeal should leave be granted, the order of 24 July 2026 will remain in effect and the Vision Plan remains the adopted business rescue plan of THL [Tongaat].
“The BRPs will continue to assess the position of THL and the implementation of the adopted business rescue plan in light of the above and any further advice received in this regard,” they said.
“The BRPs remain committed to progressing the business rescue process and to working with all stakeholders to achieve the objectives of the business rescue proceedings and the best possible outcome for employees, growers, creditors and the broader sugar industry.”
This article was republished from Moneyweb. Read the original here.
