Oakbay Investments (Pty) Ltd v Tegeta Exploration and Resources (Pty) Ltd and Others

Following the termination of banking facilities by major banks, several companies in the Oakbay Group, including Tegeta Exploration and Resources (Pty) Ltd and its subsidiaries, were placed in voluntary business rescue in February 2018. Oakbay Investments (Pty) Ltd, the holding company, was not itself in business rescue. The same business rescue practitioners (BRPs), Messrs Knoop and Klopper, were appointed to Tegeta and its subsidiaries. Oakbay applied for their removal under s 139(2)(e) of the Companies Act 71 of 2008, alleging conflicts of interest arising from disputed inter‑company loans between Tegeta and its subsidiaries, particularly Optimum Coal Mine (OCM). Oakbay contended that the BRPs’ simultaneous roles caused them to compromise Tegeta’s claims against OCM. The High Court dismissed the application and refused leave to appeal, leading Oakbay to seek leave to appeal to the Supreme Court of Appeal.

The application for leave to appeal was dismissed with costs, including the costs of two counsel where employed and the costs of the application to adduce further evidence.

The case clarifies the scope of s 139(2)(e) of the Companies Act and confirms that the mere existence of inter‑company claims within a corporate group does not, without more, constitute a conflict of interest justifying removal of business rescue practitioners. It underscores the distinction between the duties of BRPs and those of liquidators, and affirms judicial reluctance to interfere in business rescue absent clear misconduct or incapacity.