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City Press reports that the winding down of Gupta family company VR Laser was halted last week when former employees petitioned the business rescue practitioners to stop a R29 million payment to the Bank of Baroda.
The money was raised at a recent auction of VR Laser’s equipment, but the amount is not nearly enough to cover claims against the company, which was one of eight Gupta companies that voluntarily went into business rescue this year. Bank of Baroda is the only secured creditor and has a claim of R33 million against VR Laser. Former employees, however, collectively have a recognised claim of roughly R35 million for unpaid salaries and separation packages. A campaign by former employees was launched last week to stop the payout to Bank of Baroda based on the argument that their claim outranked that of the bank. Rescue practitioner Kurt Knoop wrote to interested parties saying that the rescue practitioners “are therefore not in a position to release any funds until the impasse is either resolved in writing between the employees and the Bank of Baroda, or if a declaratory order is received”. In an email to the rescue practitioners last week, Oakbay Group’s HR director André Oldknow said that there was a “growing groundswell” of former VR Laser employees who wanted to challenge the ranking of Bank of Baroda’s claim above their own.
- Read the full original report by Dewald van Rensburg at City Press
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