Billionaire Robert Gumede’s Tongaat Hulett faces fresh $32 million court setback

South African billionaire Robert Gumede’s rescue of Tongaat Hulett has hit another hurdle after the Constitutional Court refused the sugar producer’s final attempt to appeal a ruling over R517 million ($32 million) in disputed industry payments.

In an order dated August 24, South Africa’s highest court refused Tongaat Hulett’s application for leave to appeal, finding that the case had no reasonable prospects of success. The court also ordered the company’s business rescue practitioners to pay legal costs.

The decision leaves in place an earlier Supreme Court of Appeal ruling that Tongaat could not suspend certain statutory payments owed under South Africa’s regulated sugar industry while the company was under business rescue.

The South African Sugar Association has put the outstanding obligation at approximately R517 million. The Constitutional Court did not order Tongaat into liquidation or determine a new amount owed. Instead, it closed the company’s final avenue of appeal over whether the payments could be suspended.

The ruling comes just over two months after Gumede’s Vision Group helped save Tongaat Hulett from liquidation in June.

Billionaires.Africa previously reported on the June rescue deal involving Vision Group, the state-owned Industrial Development Corporation and Tongaat’s business rescue practitioners, which allowed the 134-year-old sugar producer to continue operating.

Under that agreement, the Industrial Development Corporation extended post-commencement funding to Tongaat while the rescue transaction was implemented. The deal removed the immediate threat of liquidation but did not end the company’s business-rescue process or resolve all of its outstanding obligations.

The August court ruling is therefore a new development in Gumede’s wider attempt to turn around the troubled company.

The dispute centres on payments required under South Africa’s sugar-industry framework. Tongaat’s business rescue practitioners had suspended payments to the South African Sugar Association, arguing that the obligations could be treated as liabilities affected by the rescue process.

The Sugar Association challenged that position, maintaining that the payments arose from statutory requirements under the Sugar Act and Sugar Industry Agreement.

The Supreme Court of Appeal sided with the association in December 2025, finding that the Sugar Industry Agreement had become subordinate legislation after being promulgated by the government. Tongaat subsequently took the matter to the Constitutional Court.

The Constitutional Court has now refused to hear the appeal, leaving the earlier ruling in force.

Tongaat’s approved rescue plan had anticipated that disputed sugar-industry payments would be placed in escrow while the legal dispute was being resolved. The latest ruling settles the central legal question in favour of the Sugar Association, although the precise payment process remains tied to the implementation of the rescue plan.

The ruling does not mean Tongaat has collapsed or that Gumede’s rescue agreement has been overturned.

Tongaat entered business rescue in October 2022 after years of financial distress linked to an accounting scandal that overstated the company’s assets and profits. Its sugar operations remain important to South Africa’s agricultural economy, supporting growers, workers, transporters and suppliers across the sugar value chain.

Gumede’s Vision consortium became central to Tongaat’s rescue after acquiring approximately R11.7 billion of lender debt connected to the company and positioning itself to take control of the business.

The billionaire has also outlined plans to diversify Tongaat beyond traditional sugar production, including using sugarcane to produce ethanol, electricity and other products.

However, the rescue still faces another legal challenge. Rival bidder Terris Sugar is challenging aspects of the Vision-led rescue plan and the process through which it was selected. That dispute remains separate from the Constitutional Court case.

For Gumede, the latest ruling adds another financial pressure to a rescue effort that has already survived a liquidation threat and multiple legal battles.

The June agreement kept Tongaat Hulett alive. The August 24 Constitutional Court decision shows that keeping the company operating and successfully turning it around remain two different challenges.