SA Canegrowers

SA Canegrowers welcomes the judgement that Tongaat Hulett business rescue must adhere to sugar industry legislation

Media Release

Andrew Russell Chairman

SA Canegrowers

May 8, 2024

SA Canegrowers welcomes the Durban high court judgment on Monday that confirmed outstanding levies are due to be paid by Tongaat Hulett to the sugar industry.  These levies are an essential to the economic survival of sugarcane farmers and the tens of thousands of livelihoods that they support.  

Judge Rashid Vahed confirmed that the Sugar industry Agreement (SIA) is statutory legislation and payments due under it are still required to be made during the business rescue process, that suspends 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 Sugar Industry Agreement must be honoured during business rescue and the Companies Act, that 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 as it was in business rescue.   

Tongaat applied for leave to appeal the ruling. THL’s application was opposed by the Minister of Trade, Industry and Competition, Mr Ebrahim Patel, the South African Sugar Association (SASA), 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, amongst others.  

On Monday, May 6, 2024, 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 still petition the Supreme Court of Appeal or the Constitutional Court on the matter, SA Canegrowers remains hopeful that the clarity of the Judge Vahed’s ruling may bring closure to the matter. The overdue payments of THL’s obligations are putting growers and livelihoods at risk.  

Media enquiries contact

Gerhard Mulder

083 305 9361 

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