Knoop and Another NNO v Gupta (No 2)

Two Gupta-controlled companies, Islandsite Investments One Hundred and Eighty (Pty) Ltd and Confident Concept (Pty) Ltd, were placed under voluntary business rescue in February 2018 due to financial distress after becoming 'unbanked'. The appellants, Messrs Kurt Knoop and Johan Klopper, were appointed as business rescue practitioners (BRPs). In November 2018, Mrs Chetali Gupta, a shareholder, applied to the Gauteng Division of the High Court for their removal under s 139(2) of the Companies Act 71 of 2008, alleging incompetence, failure to follow approved business rescue plans, ignoring third-party offers in favour of auctions, improper VAT practices, and lack of independence. A full court granted the removal order. The BRPs appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order removing the business rescue practitioners was set aside and replaced with an order dismissing the removal application with costs. Costs of the abandoned intervention application were ordered against the intervening party personally.

This judgment is a leading authority on the removal of business rescue practitioners under s 139(2) of the Companies Act. It clarifies the evidentiary threshold required, the proper interpretation of statutory grounds such as incompetence and lack of independence, and affirms that removal is an exceptional remedy not to be granted lightly. The case underscores the need for proper factual findings by courts of first instance and provides guidance by analogy to the removal of trustees, liquidators, and executors.