Samons NO and Others v Member of the Executive Council for the Department of Community Safety and Transport Management of the North-West Provincial Government and Another (Appeal) (039123/2024) [2025] ZAGPPHC 1355 (15 December 2025)

begin wrapper begin container begin header begin slogan-floater end slogan-floater - About SAFLII About SAFLII - Databases Databases - Search Search - Terms of Use Terms of Use - RSS Feeds RSS Feeds end header begin main begin center # South Africa: North Gauteng High Court, Pretoria South Africa: North Gauteng High Court, Pretoria You are here: SAFLII >> Databases >> South Africa: North Gauteng High Court, Pretoria >> 2025 >> [2025] ZAGPPHC 1355 | Noteup | LawCite sino index ## Samons NO and Others v Member of the Executive Council for the Department of Community Safety and Transport Management of the North-West Provincial Government and Another (Appeal) (039123/2024) [2025] ZAGPPHC 1355 (15 December 2025) Samons NO and Others v Member of the Executive Council for the Department of Community Safety and Transport Management of the North-West Provincial Government and Another (Appeal) (039123/2024) [2025] ZAGPPHC 1355 (15 December 2025) Download original files PDF format RTF format make_database: source=/home/saflii//raw/ZAGPPHC/Data/2025_1355.html sino date 15 December 2025 FLYNOTES: COMPANY – Business rescue practitioner – Removal from office – Non compliance with core duties as practitioner – Engagement in conduct contrary to statutory requirements – Prolonged failure to produce a compliant plan – Reliance on unapproved public financing – Absence of financial reporting – Creation and use of unauthorised bank accounts – Irregular dispositions of rights – Erosion of transparency – Discretionary choice to remove practitioner justified – Companies Act 71 of 2008 , s 139(2). HIGH COURT OF SOUTH AFRICA (GAUTENG DIVISION, PRETORIA) CASE NO: 039123/2024 (1) REPORTABLE:  NO (2) OF INTEREST TO OTHER JUDGES: NO (3) REVISED. DATE: 15 DECEMBER 2025 SIGNATURE In the matter between: THOMAS HENDRICK SAMONS N.O. First Appellant THOMAS HENDRICK SAMONS Second Appellant NORTH-WEST TRANSPORT INVESTMENT (SOC) LTD Third Appellant NORTH-WEST STAR (SOC) LTD Fourth Appellant ATTERIDGEVILLE BUS SERVICE (SOC) LTD Fifth Appellant and THE MEMBER OF THE EXECUTIVE COUNCIL FOR THE DEPARTMENT OF COMMUNITY SAFETY AND TRANSPORT MANAGEMENT OF THE NORTH-WEST PROVINCIAL GOVERNMENT First Respondent THE AFFECTED PERSONS IN THE THIRD, FOURTH, AND FIFTH APPELLANTS Second Respondent THE MEMBER OF THE EXECUTIVE COUNCIL FOR THE DEPARTMENT OF PROVINCILA TREASURY OF THE NORTH-WEST PROVINCIAL GOVERNMENT Intervening Party Summary:   Business rescue – removal of practitioner in terms of section 139(2) of the Companies Act – Business Rescue Practitioner (BRP) removed by court a quo – although approach of court a quo incorrect, no material misdirection on the facts – found, on appeal that a number of instances of non-compliant conduct by the BRP proven – these included PFMA non-compliance, failure to publish  a business rescue plan or to do it timeously, failure to produce annual financial statements, irregular payment of pre-commencement debt, failure to prioritise payment of employees’ salaries, mismanagement and a lack of compliance with reporting obligations. Removal of BRP justified in the circumstances. Appeal dismissed. ORDER The appeal is refused with costs, including the costs of two counsel, where employed. JUDGMENT The matter was heard in open court and the judgment was prepared and authored by the judge whose name is reflected herein and was handed down electronically by circulation to the parties’ legal representatives by email and by uploading it to the electronic file of this matter on Caselines.  The date of handing-down is deemed to be 15 … December 2025. DAVIS, J  (HASSIM J and VAN NIEKERK AJ concurring) Introduction [1] The matter concerns an appeal against the removal from office of a business rescue practitioner (“BRP”), Mr T H Samons, in terms of the provisions of section 139 (2) of the Companies Act, by the court a quo, per Kooverjie J on 21 November 2024.  The matter came before us by leave of the Supreme Court of Appeal. [2]             The appellants are the BRP and the three state owned companies under business rescue, being Northwest Transport Investment (SOC) Ltd (NTI), Northwest Star (SOC) Ltd (NWS) and Atteridgeville Bus Services (SOC) Ltd (ABS). [3]             The MEC for the Department of Community Safety and Transport Management of the Northwest Provincial Government (COSATMA) is the first respondent and the previous intervening party, the MEC for the Department of Provincial Treasury of the Northwest Government (Treasury) is the second respondent. [4]             The BRP was appointed as the business rescue practitioner of the three companies respectively on 21 July 2022 (NTI), 4 August 2022 (ABS) and 16 September 2022 (NWS).  The business recue proceedings of the three companies were conducted as if they were a single company and were collectively referred to as the “NTI companies”. Proceedings in the court a quo [5] In the court a quo COSATMA sought the removal of the BRP on grounds of incompetence, dereliction of statutory duties, and unlawful conduct, including failure to comply with the Companies Act [1 ] and the Public Finance Management Act [2] (the PFMA).  The BRP had opposed the application and placed blame on COSATMA and the Gauteng Department of Roads & Transport (GDRT) for alleged non-cooperation and failure to fund the operations of the NTI companies. [6] The grounds for removal were listed by COSATMA in its founding affidavit. The first cause of complaint was that the BRP had failed to publish a business rescue plan timeously and, extensions for its publication were unlawful . In addition, under the control of the BRP, there was a “staggering” escalation of the NTI companies’ liabilities. The BRP also failed to prioritize the payment of salaries of employees. The BRP was further accused of having failed to comply with the PFMA by opening bank accounts without proper authorization and by failing to obtain the necessary approval of the Premier of the province for the financing of the business rescue plan. The BRP was also accused of favouring a creditor of the companies, Transnat Coachlines (Pty) Ltd (Transnat) at the expense of affected persons. This included a failure to properly investigate Transnat’s claims and the making of unlawful payments to it and/or its joint venture with another corporation, Ziggy Investments CC. The BRP was also accused of having a conflict of interest, of attempting to dismiss the directors of the companies from their respective boards, of being non-compliant with tax and employment legislation and by attempting to sell assets of the companies. [7] In respect of the delay in publishing the business rescue plan, the court a quo referred to the facts that the first business rescue plan was only prepared and “circulated” on 3 July 2023, the second plan was “circulated” on 18 September 2023 and the third plan was only adopted in July 2024. The finding was that these time periods exceeded the 25-day time period since the date on which the BRP was appointed as prescribed in section 150(5)(b) of the Companies Act. [8] Regarding the extensions of time, the court a quo found that although extensions were indeed sought between September 22 and May 2023, but when COSATMA refused to accede to further extensions after November 2020, the BRP only sought extensions from the creditors. As a result, the third plan, which was thereafter approved, was adopted without COSATMA’s consent.  The court a quo held that extensions of time for the publishing of business rescue plans sought by the BRP from creditors after COSATMA had refused further extensions, were unlawful. [9] In respect of the failure to have produced and submitted annual financial statements it was found that it had been proven that the annual financial statements for the years 2019 to 2024 were neither prepared nor made available to COSATMA and that the BRP only informed the Auditor-General 18 months after his appointment of his difficulty with the compilation of the financial statements [10] Although the court a quo acknowledged the challenges faced by the BRP, principally being the absence of source documents and that the relevant officials, being the director and head of the audit committee Mr. Sadiki and the CFO of the companies Mr. Kenosha, failed to assist him and were in fact recalcitrant in doing so, it found in this regard as follows “ It is my view that the BRP was required to manage the process with a level of skill and independence and could not merely lay the blame at the door of the officials. He had an obligation to report the state of the entities’ affairs to the MEC and proffered no explanation as to why he did not inform the applicant of the challenge he faced”. [11] The court a quo found that the lack of reporting was exacerbated by the BRP painting a different picture to the affected parties. It was only on 19 March 2023 when the BRP, in response to a first attempt at his removal, responded as follows “ An independent auditing firm has been employed at additional expense to manage the financial reporting requirements of NTI and ultimately to perform the requisite audit in conjunction with the BRP team. This audit is currently in progress for purposes of compiling the outstanding annual financial reports and the other current reports to be submitted to the Auditor General .” It was found that this statement was not true. At that time the external auditing firm had not been mandated to conduct an audit and statements to the effect that such an audit was in progress were misleading and prejudicial to creditors and the affected parties. It was lastly found on this topic that it was concerning that the BRP did not even have management reports in place for the duration of the business rescue proceedings [12] In respect of the issue of employees’ salaries, the court a quo found that it was common cause that the employees had not been paid regularly and on a monthly basis during the course of the business rescue proceedings. The court a quo acknowledged that the BRP had pointed out that in order to keep the bus operations afloat he had no option but to pay Transnat and the various suppliers. He persisted that he had balanced all the factors envisaged in the Companies Act and on the occasions that he paid the suppliers he had no funds left to pay the salaries. The finding of the court of a quo was that the BRP’s reasoning evinced the fact that he failed to appreciate that he had little or no discretion regarding the payment of salaries and that his understanding that it was permissible to skip salary payments as they would eventuate to post commencement finance claims by virtue of section 135(1)(a) of the Act, was dismissed as being fatally flawed. [13] In respect of the non-compliance with the PFMA and Treasury Regulations the court a quo found that non-compliant conduct had been proven. The learned judge firstly referred to the fact that in terms of section 55 of the PFMA the BRP was required to regularly submit financial reports to COSATMA, Treasury and the provincial government. The repeated requests for information from these departments indicated that there was no such financial reporting. The court a quo further found that the BRP's explanation for his failure to respond to various correspondences from September 2023 to February 2024 as well as his failure to respond to the portfolio committee's request for information, illustrated his incompetence. She further found that his response via his attorneys to the effect that he had not prepared any financial reporting documents, was “glaringly untenable”. [14] In respect of compliance with the PFMA further, the court a quo referred to a report from the Government Technical Advisory Centre (GTAC) commissioned by the MEC of COSATMA.  The GTAC report, of which the business rescue practitioner was acutely aware, recorded that NTI’s contracts with the GDRT would expire at the end of March 2020 and that the renegotiation of such contracts was inevitable. GDRT had to ensure that NTI had a plausible plan to restructure its operations and that its own governance requirements would not be violated when contracting with NTI.  It was imperative for the GDRT not to expose itself to political embarrassment or allegations of financial misconduct in these circumstances.  Accordingly, the adoption of the business rescue plan was crucial for the GDRT in its negotiations with the BRP. The GTAC report recorded in this regard that since the NTI companies were actively seeking financial assistance from the provincial government, regard had to be given to section 38(1)J of the PFMA whereby an accounting officer had to ensure that any entity to which it transfers funds had systems and internal controls in place to manage its funds. [15] It was found by the court a quo that the BRP had, without the consent or approval of COSATMA, ceded NWS's claims as security to third parties. The BRP further encumbered NTI's immovable property to the value of R130 million in favour of Transnat.  It was also found that the BRP in this fashion did not appreciate his statutory obligations and contravened section 66(3)(d) of the PFMA.  This section prescribes that the MEC for Finance of a province is the responsible person regarding such contracts.  The BRP had omitted to put such a requirement in place. [16] As a consequence of the above, the BRP was removed from office on 21 November 2024. The application for leave to appeal that order was refused on 27 March 2025 whereafter the Supreme Court of Appeal was petitioned and leave was granted to appeal that order to this court. The appellants’ attack on the judgment in the court a quo [17] The appellants argued that the court a quo had erred by failing to consider all the grounds for removal raised in the affidavits and only dealt with them selectively.  They further argued that in respect of all the individual grounds listed by COSATMA in the founding affidavit, the BRP had provided cogent explanations.  Accordingly, the appellants contended that the court a quo had adopted an incorrect approach by concluding that section 139 does not require a court to determine all the complaints raised.  The appellants argued that this constituted a misdirection because a court is obliged to consider “all relevant facts” before deciding on a removal.  The appellants in particular rely on the judgment in Knoop v Gupta [3] for the principle that removal requires a factual foundation for the statutory grounds alleged to have been contravened and that all evidence must be considered. [18] The appellants further argued that the judgment contained material misdirections of fact and law regarding the issues relied on by the court a quo for removal, being the Transnat claim, the alleged failure to prioritize salaries, the absence of annual financial statements and delays in publishing a business rescue plan. [19] Concerning the Transnat claim, the court a quo found that COSATMA’s allegation that the claim was an inflated one, was common cause.  The appellants argued that this constituted a misdirection as that allegation was disputed on the papers and that the BRP had fully explained his verification of the claim. [20] In respect of salaries the appellants submitted that section 135(1)(a) of the Companies Act does not require immediate payment of salaries and that prioritization of operational expenses was necessary to maintain services.  They argued that the court a quo misinterpreted section 135 of the Companies Act. [21 ] Regarding the issue of financial statements, the appellants argued that historical failures to prepare them predated the BRP's appointment and that the court a quo failed to consider the evidence of obstruction and misconduct by officials previously responsible for financial management [22] In respect of delays in publishing the business rescue plan, the appellants argued that the delays were caused by a lack of funding, strikes, missing financial records and ongoing negotiations. They stated that a draft plan had been circulated and that publication was halted at COSATMA’s instance. [23] On behalf of the BRP it was argued that he had achieved substantial progress in stabilizing the companies, improving financial performance and restoring operations and that these factors were not taken into account by the court a quo . [24] The appellants submitted that the court a quo failed to comply with the principles extracted from Vodacom v Makete [4] , specifically the obligation to give reasons.  A failure to consider material evidence constituted an unfair hearing and on this basis the appellants argued that the appeal should succeed. [25] Lastly it was argued on behalf of the appellants that in the founding affidavit it was not pertinently alleged that the BRP had failed to comply with Section 7 of the PFMA when he opened new bank accounts at First National Bank.  The BRP could therefore not have been expected to specifically deal with this alleged failure in his answering affidavit.  In this regard the appellant’s counsel also referred to paragraph 6.5 of the progress report of the BRP, dated 19 December 2022, where the opening of the three new bank accounts were disclosed.  It was also disclosed in that progress report that an application had been lodged by the BRP with the Minister of Finance to consider an exemption from the provisions of the PFMA. [26] Regarding the counter-application, the appellants argued that the court a quo erred in dismissing it rather than referring the disputes of fact to oral evidence or trial.  Concerning the alleged funding agreements with COSATMA, the appellants submitted that the BRP's removal was based on findings inconsistent with the evidence and unsupported by proper factual or legal reasoning.  They argue that their appeal should succeed and that the removal order should be set aside and that the counter-application should be referred to evidence or determined afresh. Evaluation: the applicable principles [27] Firstly, it is trite that an appeal lies against an order that is made by a court and not its reasons for making the order [5] .  It follows that, on appeal, a respondent is entitled to support the order on any relevant ground and is not confined to supporting it only for the reasons given by the court below [6] . [28]         Therefore, even if the learned judge in the court a quo may have erred in having robustly decided that the factual disputes could be decided on the papers and may have rejected the version of the BRP on certain disputed aspects as the appellants claim she did, it must still be determined by this court whether COSATMA had been entitled to the orders sought in the court a quo , on the facts established on the papers. [29] Section 139(2) provides that a BRP may be removed from office “ upon request of an affected person … on any of the following grounds: (a) incompetence or failure to perform the duties of a business rescue practitioner. (b) failure to exercise a proper degree of care … (c) engaging in illegal acts or conduct. (d) if the practitioner no longer satisfies the requirements set out in section 138(1). (e) conflict of interest or lack of independence. (f) The practitioner is incapacitated …”. [30]         With reliance on Knoop v Gupta (supra), the appellants argued that the court a quo erroneously adopted an approach that, because certain facts “stand uncontroverted”, the BRP’s removal must follow.  They further argued that the approach to factual disputes adopted by the court a quo was incorrect and amounted to an incorrect application of the Plascon-Evans Rule . [31]         For the sale of clarity, it is necessary to have regard to what the SCA had determined in Knoop v Gupta on the position regarding the removal of a business rescue practitioner.  It has been stated to be the following (at paras [17] and 18): “ The court has a discretion to either grant or to refuse an order for the removal of a BRP.  The discretion is exercised if one or more of the grounds for removal set out in section 139(2) have been established on a balance of probabilities.  However, proof of a ground for removal alone does no dictate that a order for removal must follow.  The power of removal is not combined with a duly to exercise that power…. [18] the power now given to a court is not novel ….  That power extends to the removal of executors and liquidator of companies ….  Two general principles will be that removal is not something to be ordered lightly and the primary reason justifying removal will be actual or potential prejudice or harm to the interests of the estate, trust or company and those in which interests the administration was established, such as heirs in as estate or creditors inn circumstances of insolvency ”. [32]         The steps envisaged are therefore (1) the determination of primary facts on a balance of probabilities which constitute contravention of the requirements of section 139 of the Companies Act, (2 ) to determine whether those facts caused or might cause actual or potential harm to affected parties and (3) whether such a finding justifies the exercise of a court’s discretion in favour of removal. [33] In order to determine what facts have been sufficiently established in motion proceedings, the rule is that final relief should only be granted “… if the facts state by the respondent together with the admitted facts in the applicant’s affidavit justify such an order ….  Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted ” [7] . Context [34]         Before considering, as a starting point, the facts “stated by the respondent” (in this case, the BRP), context of his position and that of the NTI companies needs to be given.  This can be found in the very detailed GTAC report (96 pages) of which the following series of extracts are crucial as they informed the whole of the business rescue proceedings.  Firstly, with reference to NTI’s own annual report immediately preceding the GTAC report, its business was recorded as follows: “ NTI is a State-Owned Enterprise registered as a private company under the Companies Act and as a Provincial Government Business Enterprise Entity in terms of Schedule 3(D) of the PFMA.  The company owns and manages a substantial commercial property portfolio and also operates the administrative head office for NWS, a wholly owned subsidiary.  NTI, NWS and NWS’s Subsidiary, ABS, operate transport services in certain areas of the Gauteng Province with limited extensions into other Provinces from four bus operating centres.  Service workshops have been established at all operating centres to maintain the bus fleet and to ensure a high level of operating efficiency.  NWS and ABS also provide private hires and contract services on request.  Weekend services between urban and rural areas are also provided” [35]         The report further makes the point that NTI is a public entity and, in a separate section of the report, refers to the PFMA requirements imposed on its board.  The report also made reference to the Protocol on Corporate Governance in the Public Sector, which provides a framework for schedule 2, 3B and 3D public entities (the NTI companies are such entities). [36]         After an extensive evaluation of the NTI companies’ operations, financial status, previous judicial management as well as liquidation proceedings, GTAC concluded that “… NTI is in deep financial distress and may already be insolvent.  There is also little prospect of it being able to trade itself into sustainability ”.  The following opinion is then expressed as to possible future options for the companies: “ Organisations in these circumstances have few options.  If it is to become commercially viable, NTI requires a combination of: - An injection of capital from its shareholder to allow it to meet its immediate liabilities and avoid an application for liquidation; - A further injection of capital in order to facilitate the recapitalisation of its fleet; - A renegotiation of the terms of the contract with GDRT’ - A rise in fares; - Organisational restructuring to reduce operational costs (e.g. by exiting the worst performing routes and/or right sizing its workforce) ”. [37]         On the issue of restructuring, GTAC advised as follows: “ Assuming that NTI seeks to avoid liquidating itself and enters business rescue, a number of initiatives have been proposed for how it might restructure its business so that it increases revenues, reduces costs or does both. It needs to be stressed that it is exceptionally difficult to see how any of these options could be implemented effectively without some form of recapitalization of the NTI, so the first initiative described is recapitalization.  This is not what is often understood by the term restructuring, which is normally understood to refer to changes to a company’s operational activities … The most obvious way in which NTI might be recapitalized is if the shareholder or some other entity in government provided it with a capital injection.  This could be a once-off injection or equity that was sufficient to allow NTI to meet its immediate liabilities (around R300 million) or a larger injection that would allow NTI to buy a new bus fleet (estimated at R1.3 billion). There are some notable challenges, however.  These include: - It is far from obvious that NWPG has the funds to inject into NTI, and the same is likely true of both GDRT and DoT. - If the funds were appropriated by an entity other than NWPG, they would, presumably, expect an equity state in NTI, which would create additional governance and institutional challenges. - Even if the funds are available, there are some legal and political challenges to overcome because the funds would have to be appropriated through an adjustments budget, during the debate about which, a political case for diverting scarce public resources to NTI would have to be made and defended.  In addition, in terms of section 38(1)(j) of the PFMA, the entity that injected funding would have to satisfy itself that NTI was able to manage those funds efficiently, effectively and transparently, failing which it would itself be at risk of engaging in financial misconduct ”. [38] A shareholder loan to the NTI companies, as “provincial government business enterprises” would be subject to not only the general PFMA requirements listed in the GTAC report, but to sections 66(1) (c) of the PFMA, which provides that “ An Institution to which this Act applies, may not borrow money … unless such borrowing … in the case of a provisional government business enterprise under the ownership control of a provincial executives, is within the limits as set in terms of the Borrowing Powers of Provincial Governments Act … ” [8] . [39]         Even if it may be argued that the above will only apply when an entity borrows money from a party outside the provincial government which owns it (although this is doubtful) then section 66(3)(d), which is of general application, will still apply.  It provides that any “transaction that binds or may bind that public entity to any future financial commitment, may only be entered into by “… the MEC for finance in the province, acting with the concurrence of the Minister, subject to any conditions that the Minister may impose … ”.  The reference to the Minister, is to the National Minister of Finance. The business rescue plan proposed by the BRP [40]         Having set out the statutory requirements imposed on the borrowing of money by the NTI companies, it is apposite to refer to what the BRP has done, with reference to his own words and conduct (lest there be any doubt about disputed evidence, as alleged before). [41]         In respect of the “final revised business rescue plan”, the BRP stated the following: “ As agreed, the duly revised and amended business rescue plan was transmitted to the applicant’s legal representatives on 18 September 2023.  This included the agreement to the effect that finance in the amount of R615 million would be provided.  I can and do confirm that, at the meeting of 15 September 2023, an agreement was reached with the parties represented by their respective attorneys … and this agreement is encapsulated and recorded in the second plan ”. [42]         The BRP continued later in his answering affidavit as follows: “ In numerous telephone conversations between my attorney (Mr Bernhard Richer) and Mr Hlahla (the applicant’s attorney) it was agreed that the funding is ready and available and that it would be forthcoming in short order … it was anticipated (and I was reassured, repeatedly) that the funding would be available virtually immediately and it was accordingly also anticipated that the business rescue  plan would and could be adopted and implemented by end of September 2023, at the latest in the first week of October 2023 ”. [43]         The abovementioned “final” plan was never published nor adopted.  Various “progress reports” followed from 23 September 2023 onwards. [44]         In the meantime, the BRP gave an undertaking to the employees of the NTI companies on 10 November 2023 that an amount of approximately R77 million would be paid towards salaries upon receipt of the “Recapitalisation Amount or any advance thereof”. [45]         On 28 November 2023, by way of a letter of the BRP’s attorney to GDRT, the BRP advised that “ the Companies’ sole source of income is the subsidy revenue that it derives from the (NWS) Negotiated contract.  This is an uncontroversial fact and we are all in agreement that the Companies at present do not have the financial wherewithal to fulfil their obligations in terms of the Negotiated Contracts, which would inevitably lead to the cancellation of the Negotiated Contract and the subsequent liquidation of the companies ….  Against this backdrop … we have been instructed to address this letter to you, as the attorneys of Transnat and Triponza, in order to record the salient terms of the solution agreed in principle in order to ensure the preservation of the Negotiated Contracts, which as stated, is the lifeblood of the Companies ”. [46]         The “Negotiated Contracts” referred to the “ABS Negotiated Contract” entered into between ABS and GDRT on 30 June 2023 and the “NWS Negotiated Contract” entered into between GDRT and NWS on 30 Jun 2023, were all entered into by the BRP. [47]         The result of the letter was an agreement between GDRT and ABS in terms of which the BRP ceded all of ABS’ “right, title and interest in and to the ABS negotiated Contract to Transnat”.  The BRP explained the reason for this as follows in the letter: in 2018, ABS effectively abandoned and made over its operations to Transnat as it had no buses or funds.  Since then, Transnat had effectively run the business of ABS and rendered services to GDRT. [48] In the letter further, the BRP painted the above as a historical fact and therefore alternatively argued that initial takeover effectively constituted “ a cession in securitatem debiti in favour of Transnat alternatively it constitutes a delegation agreement between GDRT, Abs and Transnat.  On any basis, irrespective of the nomenclature, a transfer has occurred ” .  Based on this argument, the BRP assuaged any concerns from Transat about compliance with the PFMA on the basis that control of the ABS negotiated contract was not in ABS’ hands, but in the hands of Transnat, and had no economic benefit for ABS.  Therefore, so the BRP concluded “… it cannot be argued that the same transaction concluded between Transnat and ABS in respect of ABS operations constitute a “Significant” transaction as contemplated in Section 54(2)(d) of the PFMA … [9] ”.  Accordingly, so the BRP’s conclusion went, no statutory requirements had to be complied with. [49]         The BRP further indicated that the above state of affairs was reflected in the initial business rescue plans.  These plans had to be revised and could not be implemented due to an absence of recapitalisation.  In the meantime further, the lack of payment of salaries caused widespread labour unrest, which lead to a prolonged strike. [50]         The strike was eventually terminated, inter alia as a result of COSATMA paying R96 million on 31 December 2023 and R18 million on 11 June 2024.  The latter payment was to the payroll administrator directly and not to the BRP. [51]         Finally, the eventual business rescue plan was published on 28 June 2024.  A second meeting of creditors was convened for 11 July 2024 and postponed to 18 July 2024.  In his supplementary affidavit, the BRP stated that this plan was adopted at the postponed meeting. [52]         The relevant parts of the business rescue plan (annexure THS1 to the BRP’s answering affidavit) relating to the topic of PFMA compliance, can be found in two alternate proposals.  The first is “Option A” which deals with recapitalisation and the second is “Option B” which envisages a “structured winding down”.  It also provided for the fees for the BRP in excess of R42 million. [53]         In respect of the recapitalisation proposed in Option A, three proposals were presented.  As an introduction thereto, the BRP explained: “ Despite the reasonable impression created that the [previous] BRP and its terms were acceptable to the shareholder … the shareholder’s team failed to formally respond to various communications addressed to them.  The BRP’s legal team continued to attempt to engage with the Shareholder’s legal team, but to no avail.  However, the BRP maintained a reasonable belief that the shareholder was desirous of implementing the terms of the 18 September Revised BR Plan … ”.  Reference was then made to public announcements of an amount of R389 million to be made available, allegedly over and above the recapitalisation amount.  The report continued “ despite what appeared to be successful negotiations, coupled with the public undertakings [by the speaker] … the shareholder failed to provide the agreed funding ”. [54]         After listing the positive result from a labour audit initiated by the BRP, resulting in a monthly saving in excess of R7 million, the first proposal (Option A: Proposal 1) was based on the BRP’s version of the prior agreement for recapitalisation, alleged to have been reached on 18 September 2023.  It provides for a recapitalisation by COSATMA of some R600 million (as calculated in par 11.3.5 of the report under “shareholder contributions). [55]         The second proposal (Option A: Proposal 2) involved an “inter-governmental bailout”, which involved the investment of a partial recapitalisation by GDRT in the amount of R144 Million. [56]         The third proposal (Option A: Proposal 3) involved a “hybrid” scenario, including the acquisition of a bus fleet and re-allocation of bus routes.  The BRP conceded that this proposal “… would require significant regulatory and statutory approvals ” and as such, “… no formal engagement regarding this option has been made to existing bus operators ”. [57]         In a nutshell then, the “plan” of the BRP, which he had eventually formulated two years after his appointment, was to borrow money from the Northwest Provincial Government, in excess of R615 million.  This would be over and above the R292 million that “the Shareholder” had already paid during the period since the BRP’s appointment to date of publication of the plan. [58]         It is not clear from the answering affidavit which option had been voted for by the creditors.  The publication of the plan only took place after the application had been launched and was disclosed in the answering affidavit.  As such, no non-compliance with the PFMA had or could have been alleged in the founding affidavit.  COSTMA has, however, consistently complained that no workable plan had been presented and that the reporting obligations on the BRP as accounting authority for the companies had not been complied with.  It is clear that these two aspects go hand in hand.  The BRP’s stance was that he had all along fully complied with his statutory obligations, which would imply that the business rescue plan was PFMA compliant. The financial reporting obligations of the BRP [59] The reporting obligations of the BRP in terms of the PFMA (in particular section 55 [10] thereof), which were mentioned in the founding affidavit were that the BRP had “… consistently refused (and continued to do so until the delivery of the founding affidavit) to report to the Provincial Legislature, the HoD of COSATMA or to me [the MEC] for the hundreds of millions of Rands that were directly deposited or transferred from the NTI companies’ other bank accounts into the BRP’s new FNB accounts ” . The opening of new bank accounts by the BRP [60]         The reference to “new FNB accounts” is a reference to par 176.1 of the founding affidavit.  Therein, under the heading “failure to comply with his obligations under the PFMA”, COSATMA complained that the BRP had, despite the companies having existing bank accounts at ABSA, opened three new bank accounts with FNB, exclusively accessible only to the BRP and his advisors. [61]         The opening of these accounts was clearly done in direct contravention of section 7(2) of the PFMA which provides that “… a public entity … may open a bank account only – (a) with a bank registered in South Africa and approved in writing by the National Treasury and (b) after any prescribed tendering process had been complied with ”.  Section 7(5) further provides that such a bank “ or any other institution that holds money for … a public entity listed in Schedule 3 … must promptly disclose information regarding the account when so requested … by the relevant provincial treasury ”. [62]         When confronted with this issue in argument, counsel for the appellants referred us to paragraph 6.5 of the BRP’s progress report dated 19 December 2022.  Therein the opening of the three bank accounts had been disclosed.  It was also recorded that the BRP had requested the Minister of Finance to consider an exemption from the provisions of the PFMA. [63]         The abovementioned   is not proof that the BRP had by his conduct, complied with the PFMA.  Mere disclosure of the opening of the accounts, does not constitute compliance with the PFMA.  The attempts at obtaining ex post facto exemptions from PFMA requirements confirm that, to the knowledge of the BRP, the PFMA and Treasury Regulations had not been complied with. [64] A further flaw in the argument presented on behalf of the BRP, is that an examination of the request for exemption itself (Annexure FA60 to the founding affidavit) reveals that it was a request in terms of section 92 [11] of the PFMA to be exempted from the provision of sections 38(1)(a)(ii) and (iii) of the PFMA [12] .  There was no reference in that request to section 7 of the PFMA. [65]         Moreover, in the founding affidavit it had been expressly alleged that, despite the request for exemption, the BRP had in fact not obtained any exemption.  This allegation was not disputed in the BRP’s answering affidavit. [66]         The result is that, on the BRP’s own version, he had been operating bank accounts in contravention of the PFMA, the provisions of which had been designed to provide for oversight over the management of public finances.  This denial of oversight was exactly what COSATMA had been complaining about in its founding affidavit and in the prior requests for information and disclosure mentioned therein.  In fact, in the founding affidavit, reference was made to the staggering amounts, estimated at being in excess of R800 million, which must have gone in and out of these accounts. [67]         It therefore comes as no surprise that the BRP had not sought or obtained any approval from Treasury for the loan which featured in the final proposed business rescue plan.  The BRP has engaged with and naively relied on promises made to him by the previous MEC for COSATMA regarding recapitalisation but only sought to formally engage the Premier long after the publication of the final plan. [68]         The BRP attempted to paint a picture that the final business rescue plan was merely a revision of previous proposed plans, which he had “circulated” but not published as required by the Companies Act, but this cannot be correct.  As set out above, the final plan had three possibilities and the BRP did not even attempt to explain which of those had been adopted.  It is clear that the three options proposed are mutually destructive and that they could not all three be implemented.  On his own version then, the BRP failed to dispel the accusation that he could not, in more than two years, come up with a workable business rescue plan. The counter-application [69]         The counter-application was launched by the BRP and the NTI companies as applicants thereto.  The relief claimed was for an order that “ the applicant shall pay the third respondent, within seven days of granting of this order … R615 000 000.00 (six hundred and fifteen million Rand) to be reflected in the books and records of the third respondent as a sub-ordinated non-interest bearing loan account (and) interest on the aforesaid sum … ”. [70]         In the context as already described above, the BRP therefore sought to enforce, by way of a court order, payment of an amount in respect of a disputed agreement, without any prior compliance with the PFMA and without any written agreement even having come into existence. [71]         The counter-application was therefore correctly refused insofar as its demise has not in any event followed the removal order. The section 18(4) appeal [72] When the removal order was initially appealed against, COSATMA sought and obtained an order for the implementation of the removal of the BRP.  The BRP appealed that order in terms of section 18(4) of the Superior Courts Act [13] .  In the light of the conclusion which we have reached, namely that the appeal should be refused, this issue has now become moot.  It might only resurface should the BRP seek special leave to appeal from the SCA. Conclusion [73]         We do not understand the judgment in Knoop v Gupta to mean that a court is in every instance obliged to consider each and every allegation regarding contravention of section 139 of the Companies Act made against a BRP.  The judgment cautions a court to only consider “all the circumstances” when it exercises its discretion in respect of proven offending conduct. [74]         Having regard to the above and the issues to be decided as referred to in paragraph [32] above, we conclude as follows: -         The compilation of a workable and legally compliant business rescue plan is one of the most crucial components of a business rescue practitioner’s obligations. -         In the present instance, the BRP has, on his own version, failed to compile such a plan.  The plan presented by him was premised on an oral recapitalisation loan in respect of which no Treasury approval has been obtained.  It also followed an extensive period during which the BRP has failed to comply with his obligations in terms of section 55 of the PFMA regarding reporting on financial aspects to COSATMA, thereby negating oversight over a public entity and all the time while operating bank accounts which, also in contravention of the PFMA, excluded the same oversight. -         We therefore find that, on a balance of probabilities the grounds for removal contemplated in sections 139(a) (failure to perform the duties of a business rescue practitioner) and 139(c) (engaging in illegal acts or conduct) have been established on the papers. -         Due to the seriousness of the offending conduct so established, we do not consider it necessary delve into the myriad of other allegations indicated earlier and which additionally occupied the court a quo . -         We conclude that the established offending conduct, has either caused COSATMA as affected party harm in that its statutory prescribed oversight obligations have been compromised or that it has the potential to harm the interests of the affected party.  The second of the three requirements set out in Knoop v Gupta to which we have referred earlier, has therefore also been satisfied. [75]         The criticism of the appellants of the judgment of Kooverjie J was that she had exercised her discretion on incorrect facts.  Having regard to the fundamental nature of the established offending conduct of the BRP and the materiality thereof to the business rescue plan and the business rescue proceedings itself in the present matter, we fail to find any basis upon which a court’s discretion could have been exercised in any other fashion than to grant an order for the removal of the BRP. Costs [76]         In the premises, where we have concluded that the appeal should fail, we find no cogent reason to depart from the customary rule that costs follow the event.  We also find no reason to intervene in the costs order granted in the court a quo . Order [77]         In the premises the order of court is as follows: The appeal is refused with costs, including the costs of two counsel, where employed. N DAVIS Judge of the High Court Gauteng Division, Pretoria I agree S K HASSIM Judge of the High Court Gauteng Division, Pretoria I agree P A VAN NIEKERK Acting Judge of the High Court Gauteng Division, Pretoria Date of Hearing: 3 and 4 November 2025 Reasons Judgment delivered: … .. 15 December 2025 APPEARANCES: For the Appellant: Adv A J Daniels SC together with Adv C de Villiers-Golding Attorney for the Appellant: Richter Attorneys, Johannesburg c/o Van der Merwe Attorneys, Pretoria For the 1 st Respondent: Adv NGD Maritz SC together with Adv JL Myburgh and Adv AA Basson Attorney for the Respondent: De Swardt Myambo Hlahla Attorneys, Pretoria For the Intervening Party: Adv M Gwala SC Attorney for the Intervening Party: Oosthuizen Caine Incorporated, c/o Ben Groot Attorneys Inc t/a GVS Law, Pretoria [1] 71 of 2008. [2] 1 of 1999. [3] 2021 (3) SA 88 (SCA). [4] 2025 JDR 3389 (CC). [5] South African Revenue Bank v Khumalo and Others 2010 (5) SA 449 (SCA) at par [4]. [6] Sentrale Kunsmis Korporasie (Edms) v NKP Kunsmisverpreiders (Edms) Bkp 1970 (3) SA 367 (A) at 395G – 396A. [7] Stellenbosch Farmer’s Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235 E – G. [8] 48 of 1996. [9] This section provides as follows: (2) Before a public entity concludes any of the following transactions, the accounting authority for the public entity must promptly and in writing inform the relevant treasury of the transaction and submit relevant particulars of the transaction to its executive authority for approval of the transaction: (d) acquisition or disposal of a significant asset; [10] Section 55 provides as follow: “ Annual report and financial statements —   (1) The accounting authority for a public entity— (a) must keep full and proper records of the financial affairs of the public entity; (b) prepare financial statements for each financial year in accordance with generally accepted accounting practice, unless the Accounting Standards Board approves the application of generally recognised accounting practice for that public entity; (c) must submit those financial statements within two months after the end of the financial year— (i) to the auditors of the public entity for auditing; and (ii) if it is a business enterprise or other public entity under the ownership control of the national or a provincial government, to the relevant treasury; and [Sub-para. (ii) substituted by s. 32 (a) of Act No. 29 of 1999.] (d) must submit within five months of the end of a financial year to the relevant treasury, to the executive authority responsible for that public entity and, if the Auditor-General did not perform the audit of the financial statements, to the Auditor-General— (i) an annual report on the activities of that public entity during that financial year; (ii) the financial statements for that financial year after the statements have been audited; and (iii) the report of the auditors on those statements. [Para. (d) amended by s. 32 (b) of Act No. 29 of 1999.] (2) The annual report and financial statements referred to in subsection (1) (d) must— (a) fairly present the state of affairs of the public entity, its business, its financial results, its performance against predetermined objectives and its financial position as at the end of the financial year concerned; (b) include particulars of— (i) any material losses through criminal conduct and any irregular expenditure and fruitless and wasteful expenditure that occurred during the financial year: (ii) any criminal or disciplinary steps taken as a consequence of such losses or irregular expenditure or fruitless and wasteful expenditure; (iii) any losses recovered or written off; (iv) any financial assistance received from the state and commitments made by the state on its behalf; and (v) any other matters that may be prescribed; and (c) include the financial statements of any subsidiaries. (3) An accounting authority must submit the report and statements referred to in subsection (1) (d), for tabling in Parliament or the provincial legislature, to the relevant executive authority through the accounting officer of a department designated by the executive authority. [Sub-s. (3) substituted by s. 32 (c) of Act No. 29 of 1999.] (4) The relevant treasury may direct that, instead of a separate report, the audited financial statements of a Schedule 3 public entity which is not a government business enterprise must be incorporated in those of a department designated by that treasury ”. [11] The section provides as follows: “ Exemptions —    The Minister, by notice in the national Government Gazette, may exempt any institution to which this Act applies, or any category of those institutions, from any specific provisions of this Act for a period determined in the notice ”. [12] The section provides as follows: General responsibilities of accounting officers. — (1) The accounting officer for a department, trading entity or constitutional institution— ( a )  must ensure that that department, trading entity or constitutional institution has and maintains — (ii) a system of internal audit under the control and direction of an audit committee complying with and operating in accordance with regulations and instructions prescribed in terms of sections 76 and 77; (iii) an appropriate procurement and provisioning system which is fair, equitable, transparent, competitive and cost-effective. [13] 10 of 2013. sino noindex make_database footer start