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The UK-based Evraz group is going to court to squash the business rescue plan to sell its South African subsidiary, Evraz Highveld Steel and Vanadium, to a Chinese group.
On Friday, Evraz accused business rescue practitioners of “manipulating” the creditors’ vote last Tuesday.
The main allegation is that the SA Revenue Service (Sars) was allowed, or even asked, to vote as a creditor after submitting its claim for R581 million shortly before the meeting.
This made Sars, and not Evraz, the single-largest creditor and thus a decisive voter.
Sars voted to sell Highveld to International Resources, a Hong Kong-based company that has aspirations in the emerging vanadium-based battery industry.
Evraz voted against this, saying the odds of the sale working out were “negligible”.
Instead, it claimed that winding up Highveld was the “only viable proposal”.
Piers Marsden, the business rescue practitioner accused of conspiring with Sars against Evraz, has hit back. “Evraz wants to fire everyone and sell off the assets piecemeal,” he told City Press on Friday.
Highveld comprises about 15% of local steelmaking capacity and employed about 2 000 people and another 1 000 contractors before going into business rescue early this year.
Unlike other creditors, who are mostly suppliers to Highveld, Evraz does not have an interest in getting the company back on its feet after a slump in demand for the metal and a surge in cheaper imports left it with insufficient funds.
It announced its intention to divest long before the business rescue began.
The allegations were “entirely baseless” and “disingenuous”, said Marsden.
“A conspiracy takes two people, and if they think I have that kind of influence at the receiver [Sars], they are mistaken.”
“I can’t ignore a creditor who arrives on the day ... that’s just the way the cookie crumbles.”
In an affidavit filed at the high court in Pretoria, Evraz claimed creditors had been “ambushed” by the sudden inclusion of Sars at the last minute.
Evraz accuses the two business rescuers of having a “material financial interest” in rigging the vote to approve the sale of Highveld.
Their fees would retroactively double to R3 500 an hour if the sale went through.
Marsden said the total business rescue fees since April were R7 million, including professional services.
The fee hike only added R2 million to costs and still compared badly with the going rate for professional consulting fees, he added.
“We always knew we might have a fight with the Russians [Evraz]. It was not an urgent application, but the business rescue practitioners intend to ask for the case to be expedited.”
Otherwise it could jeopardise the sale of Highveld, which, Marsden said, was probably the point.
