Guptas' Oakbay agents explain why they shouldn't go to jail
Management, lawyers argue they weren't in contempt of court for throwing out business rescue practitioners
Management and lawyers for Gupta-owned Oakbay will have to wait until next week to hear whether or not they will be jailed for 30 days for contempt of court.
On Thursday Judge Mohamed Ismail in the Johannesburg High Court heard argument as to why the Gupta directors and their attorneys believe they do no deserve jail time in an ongoing battle with business rescue practitioners.
This follows a spat between the BRPs and Oakbay management over access to a computer server at Oakbay’s Sandton offices earlier this month.
The BRPs were in February appointed to rescue eight Gupta companies – including Optimum Coal Mine and arms manufacturer VR Laser Services.
The Pretoria High Court in April ordered that the BRPs be granted “unfettered” access to the Oakbay premises after the BRPs were kicked out early last month. Oakbay filed two failed appeals and following a judgment by a full bench, the BRPs attempted to gain access to the server.Oakbay has maintained it wanted to protect confidential information relating to companies not under business rescue.
Following a heated exchange between lawyers for both parties, the BRPs filed an urgent application to gain access and hold Oakbay’s management in contempt – which was granted by acting Judge David Unterhalter on May 4.
Unterhalter also gave the Oakbay management and attorneys until May 22 to provide reasons why they should not be jailed for 30 days for contempt of court.
Times Select has seen an affidavit filed by Naushad Gattoo, the attorney representing Oakbay’s management in several ongoing court matters, in which reasons are provided why there was no deliberate contempt of court.
Gattoo and three of his staff together with 10 senior managers of Oakbay and its subsidiaries, including acting Oakbay CEO Ronica Ragavan and key Gupta lieutenant Salim Essa, are cited as respondents.
Ragavan and the other respondents signed confirmatory affidavits in support of Gattoo’s papers, except for Vidya Mudaliyar – Oakbay’s chief financial officer - who filed his own papers.
Gattoo argued he interpreted the previous court order to mean that the BRPs needed to be granted access to the Oakbay offices and that at no time did he understand the court order to mean the BRPs needed to be granted access to information at the offices – merely the physical premises.Unterhalter altered paragraphs in the original court order to include that BRPs must be given acess to the server. This, Gattoo argues, is key.
“I submit that my understanding and interpretation of the first order were correct because the Court granted the second Court order amplified and modified those paragraphs of the first court order to expressly include access to all information stored on a server at the premises,” Gattoo states.
“Moreover, the server in question is not one which belongs to any of the rescue entities but rather to ... Oakbay Investments. Oakbay is obviously not a party to either the first or second court order nor to the proceedings which resulted in those orders.”
Gattoo argues the server holds “confidential information pertaining to Oakbay and other companies within the Oakbay Group”.
Access was denied to the BRPs’ attorney, Bouwer van Niekerk, and an IT expert in the employ of the BRPs because Gattoo was led to understand that the intention was to copy the entire contents of the server.
Gattoo also argues that he offered to have an IT expert employed by Oakbay work together with the BRPs’ IT person to copy the relevant information.
But Gattoo said Van Niekerk expressed an “inexplicable and irrational fear” that the server would be removed overnight or the information on the server could be altered if the BRPs were not granted immediate access.The Sunday Times reported that Oakbay executives were concerned over possibly incriminating financial information stored on the server, hence the attempt to deny the BRPs access – allegations that Oakbay management denied.
“I was of the opinion that access to the server was not covered by the first court order and accordingly explained to Mr Bouwer van Niekerk and others with him that they would not be permitted access to the server,” Gattoo says.
Later in his affidavit he confirms that he advised his clients – the management of Oakbay – this was his opinion and they acted based on his advice.
Security guards were posted outside the server room by Van Niekerk and, subsequent to the Johannesburg High Court order, the BRPs were allowed access to the server.
Times Select understands financial investigators have been combing the data relating to Gupta businesses under the BRPs’ control to gain insight to what led to the company’s precarious financial position.
Mudayliar meanwhile argues he has resigned from Oakbay and was not involved in denying the BRPs access to the server.
He argued that his last day is on May 31 and, in any case, he would simply have been following instructions of Ragavan, the acting CEO of Oakbay.