Local company Afro-Map has filed papers at the South Gauteng High Court challenging the recent acquisition of transformer producer SGB-Smit Power Matla (SSPM) by electrical infrastructure firm Actom, claiming bias by the business rescue practitioners involved in the deal and bad-faith conduct by theIndustrial Development Corporation. Both the rescue practitioners and the IDC, however, have denied any wrongdoing. In court papers seen by theMail & Guardian, Afro-Map claimed Ian Fleming and Warren Castle, who were appointed business rescuers for SSPM in September 2023, had applied “flawed reasoning” in recommending the acquisition and acted in a manner that was “irrational, unreasonable and procedurally unfair”.
An affidavit by Afro-Map managing director Martin Ntuli cited Fleming, Castle, Actom, SSPM, the IDC — which is involved in the matter as a senior secured creditor — and state power utilityEskomas respondents. The clash comes as South Africa emerges froma power crisisthat had plagued the country for decades, with experts stressing the importance of strengthening local transmission manufacturing to stabilise the national grid. They said the domestic manufacture of components such as transformers and high-voltage cables is essential for the power utility building the required new transmission lines — an estimated 1 400 km annually over the next decade.
In the Afro-Map affidavit, Ntuli said SSPM’s business rescue practitioners (BRPs) had acted in a manner that was “irrational, unreasonable and procedurally unfair”. “The conduct of the BRPs, IDC and Eskom, perpetuates the disadvantages experienced by the majority of black South Africans in participating meaningfully in the national economy,” he said. “This undermines the constitution, achievement of equality and transformation of sectors dominated by a few players, who are largely white.” Ntuli said when Afro-Map showed interest in bidding for SSPM, the business rescue practitioners had encouraged the company to present an offer “because the offers they had received were not satisfactory and were not accepted by creditors”.
Read Full Article on Mail & Guardian
[paywall]
“We were told we were the only bidder. SGB-Smit Germany held 49% in this business and owned the backbone technology. Besides being the shareholder, SGB-Smit Germany licensed its technology to SSPM,” the affidavit states.
“SGB-Smit Germany agreed to enter into a technology licensing agreement that would include all technical support and know-how. We were given till June 2024 to make an offer, which we did.”
[/paywall]
