Capitec wants to appeal ruling on selling shares to settle state capture losses
FIN24 / 07 DECEMBER 2019 - 17.10 / JAN CRONJE
Capitec has filed an application for leave to appeal a judgement of the Johannesburg High Court ordering it to consent to a Gupta-linked company selling its shares in the bank to pay back losses suffered by a Transnet pension fund.
The order was handed down by Judge Bashier Vally on Tuesday, who gave Capitec two working days to give its consent to Coral Lagoon, an affiliate of Regiments, to sell 810 230 Capitec shares.
"Capitec has now considered the judgment by Judge Vally, J. Capitec has filed an application for leave to appeal today," the group said in a statement on Thursday afternoon. "That application is pending before the Court. A further statement will be made once the application for leave to appeal has been decided." The bank did not say on what grounds it had filed the application for leave to appeal.
The reason that Coral Lagoon wants to sell its shares stems from a court victory by a Transnet pension fund against Regiments, a financial services group linked to the Gupta family and its associate Salim Essa. Regiments was ordered to pay the fund R500m, and wanted to sell the Capitec shares to cover the costs. Regiments owns 59% of an entity called Ash Brook Investments, which in turn owns 100% of Coral Lagoon.
Capitec took legal action to prevent Regiments from selling the shares, in part because it wanted to protect its B-BBEE status. The Regiments affiliate, Coral Lagoon, which owns the shares, is black-owned.
Capitec previously said it issued the shares to Coral Lagoon to creating an enduring broad-based black economic empowerment transaction.
"Transnet has reached a settlement agreement with parties implicated in state capture - at the expense of Capitec," its CFO Andre du Plessis said in a statement in September, adding that the agreement was concluded "on the basis that the shares held by Coral may only be sold to black persons to establish a lasting black-owner relationship with Capitec."
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