Tongaat Hulett Starch mill in Germiston. Judge Rashid Vahed said the Sugar Industry Agreement (SIA) was statutory legislation and, therefore, the payments due under it were required to be made during the business rescue process that suspended many other payments. File photo
The South African Canegrowers Association has welcomed the Durban high court judgment that confirmed outstanding levies were due to be paid by Tongaat Hulett to the sugar industry.
On Wednesday, the association said the levies were essential to the economic survival of sugar cane farmers and the tens of thousands of livelihoods they supported.
Judge Rashid Vahed said the Sugar Industry Agreement (SIA) was statutory legislation and, therefore, the payments due under it were required to be made during the business rescue process that suspended many other payments.
The business rescue practitioners of Tongaat Hulett Limited (THL) had sought leave to appeal the December 2023 ruling by Judge Vahed.
The December ruling found that the SIA must be honoured during business rescue and the Companies Act, which legislates business rescue, did not override it.
This means payments due under this agreement were required to be paid by the millers, such as Tongaat, even while it was in business rescue.
Tongaat applied for leave to appeal the ruling.
THL’s application was opposed by Minister of Trade, Industry and Competition Ebrahim Patel, the South African Sugar Association, SA Canegrowers, SA Sugar Export Corporation, SA Sugar Miller’s Association, South African Farmers’ Development Association, RCL, Illovo, Gledhow Sugar Company (itself in business rescue), Umfolozi Sugar Mill, UCL and thousands of affected growers, among others.
On Monday, Judge Vahed dismissed THL’s application with costs.
The purpose of the SIA is to ensure that growers, millers and refiners each receive an equitable share of the proceeds from local sugar production.
It follows from the ruling that THL must honour the financial obligations under the SIA and pay the almost R526 million the new owners agreed to pay the industry, including growers, when the court battle came to an end.
Judge Vahed was clear that the sugar industry was unified in its understanding of the SIA and the importance of the sugar industry in South Africa’s economy.
Although the Tongaat business rescue practitioners may petition the Supreme Court of Appeal or the Constitutional Court on the matter, SA Canegrowers said that it remained hopeful that the clarity of the Judge Vahed’s ruling could bring closure to the matter.
“The overdue payments of THL’s obligations are putting growers and livelihoods at risk,” SA Canegrowers said in a statement.
BUSINESS REPORT