The appeal in Africa Agriculture and Trade Investment Fund v Vienings (74/2024) [2026] ZASCA 19 arose from the failed business rescue of Cape Concentrate (Pty) Ltd (Cape Concentrate), a tomato processing business whose financial distress was closely linked to its farming sister company, Rumibyte (Pty) Ltd. Francois Vienings was appointed as business rescue practitioner to both entities. Africa Agriculture and Trade Investment Fund (AATIF), an international development finance institution, advanced funding of approximately USD 8 million to Cape Concentrate during the rescue process. When the business rescue ultimately failed and Cape Concentrate was placed into liquidation, AATIF sought to hold Vienings personally liable for its losses.

AATIF’s case rested on two key allegations. First, that Vienings acted recklessly by failing to terminate the business rescue proceedings and place Cape Concentrate into liquidation when, according to AATIF, it had become clear that rescuing Cape Concentrate was no longer viable. Second, that he acted unlawfully and recklessly by allowing loan funds advanced by AATIF to be used to satisfy “rand-for-rand” guarantees demanded by a strategic farming partner, rather than strictly in accordance with the funding agreement.

Relying on section 424(1) of the Companies Act 61 of 1973 (1973 Companies Act) and section 140(3)(c)(ii) of the Companies Act 71 of 2008, AATIF argued that this conduct amounted to reckless or grossly negligent conduct by the business rescue practitioner, justifying the “exceptional remedy” of personal liability.

Findings

Both the High Court and the SCA rejected these arguments.

The SCA reaffirmed that section 424 of the 1973 Companies Act is not intended to punish poor commercial judgment or business decisions that fail with hindsight. Drawing on established authority, the SCA emphasised that personal liability arises only where conduct goes beyond mere negligence and becomes “grossly unreasonable”, reckless or dishonest. Business rescue is, by its nature, a risky endeavour, and courts must be slow to stigmatise decisions taken in good faith simply because they do not succeed.

On the facts, the SCA found that Vienings genuinely believed there were reasonable prospects of rescuing Cape Concentrate. Crucially, that belief was shared by AATIF itself, which conducted an extensive due diligence, approved the business rescue plan, remained closely involved throughout the process, and continued to advance funding even after being informed that loan proceeds were being used to support the farming operations. The SCA noted that AATIF never sought to terminate the business rescue proceedings while they were ongoing for breaching the funding agreement, despite having the contractual right to do so.

While the SCA accepted that aspects of Vienings’ conduct may have been negligent, it held that they fell well short of the gross negligence or recklessness required to pierce the corporate veil and impose personal liability.

Unless appealed to the Constitutional Court, the judgment provides certainty for business rescue practitioners, while reminding business rescue practitioners of their statutory duties. It confirms that courts will respect commercial judgment exercised in complex rescue scenarios, provided practitioners act transparently, in good faith, and with ongoing engagement from stakeholders. For lenders and creditors, the decision underscores the importance of active oversight during business rescue proceedings and the difficulty of shifting commercial risk onto practitioners after the fact.