The sale of South African sugar giant Tongaat Hulett is now facing a police investigation. The Zulu Royal House has lodged allegations with the police about how the sale of the company's businesses to Vision, a consortium led by businessman Robert Gumede, was represented and concluded. And according to SA Canegrowers, KwaZulu-Natal police commissioner Nhlanhla Mkhwanazi has asked the Industrial Development Corporation (IDC), the state-owned financier, to pause any further payments still due under the deal while the investigation runs.
What the police have asked for
The request was made at a closed-door meeting Mkhwanazi called in Durban on 23 October, according to a letter from SA Canegrowers chairperson Higgins Mdluli to sugar cane growers. Mdluli said the Hawks would set up a dedicated team to investigate, with Mkhwanazi overseeing the process. Vision's representatives weren't invited to the meeting, and police have not said whether the investigation targets the consortium or any individual. As Mdluli put it, "these are allegations at this stage."
It's unclear whether payments have actually stopped. The letter says the request includes payments to Standard Bank, but the exact nature and value of the payments affected haven't been made public. Before the meeting, Tongaat had told growers it was waiting for Vision and the IDC to confirm the deal would be implemented by 2 November, with grower payments to follow that week. Whether that went ahead hasn't been reported.
Why the timing matters
The request came less than two weeks before Tongaat was delisted from the JSE on 3 November, ending a 74-year listing. Its shares had been suspended since July 2022, and shareholders get nothing from the delisting. The company has been in business rescue since October 2022, and relies on a R2.5 billion funding facility, extended to 30 November, to keep operating while the deal is finalised. Mdluli said Tongaat confirmed at the meeting that October salaries had been paid, but that it didn't have enough money for month-end grower payments without more financing.
That's what makes this more than a legal sideshow. Tongaat supported more than 25,000 jobs and about 77% of KwaZulu-Natal's sugar industry revenue, and SA Canegrowers has asked for the impact on about 18,000 growers to be put directly to the IDC's board. Until the investigation says more, the people depending on this deal will be left waiting a little longer.
