New PVoC regime for Chinese imports; A1 Group rescue dismissed across six companies

The Minister of Trade, Industry and Competition has issued a Ministerial Directive under section 33 of the Standards Act, 2008, introducing a Pre-Export Verification of Conformity (PVoC) Programme for certain unregulated products imported from the People's Republic of China. Importers of products listed in Annexure 1 to the Directive must obtain a Certificate of Conformity (CoC) confirming compliance with applicable South African National Standards (SANS) or recognised reference standards before importation. The CoC must accompany the goods as supporting documentation. SARS and the Border Management Authority may verify compliance within their existing statutory mandates. The Directive applies only to unregulated products — those not already subject to compulsory specifications administered by the NRCS — and comes into operation six months after publication, i.e. 20 September 2026. Importers should consult the full gazette to determine whether their product categories fall within Annexure 1.

A1 Capital applied to place its subsidiary, Urban Lifestyle Investment Holdings, under business rescue. The A1 Group owed Nedbank over R800 million (secured by mortgage bonds across group properties) and the UIF approximately R845 million. The proposed rescue plan (the Gribnitz plan) was prepared without audited financial statements, and management accounts were deliberately withheld from the court. Nedbank and the UIF brought counter-applications for provisional winding-up. Five related companies in the A1 Group were subject to identical proceedings.

The court held: The court dismissed the business rescue application and granted provisional winding-up with immediate effect. It held that the Gribnitz plan was unpersuasive and failed to demonstrate reasonable prospects of rescue, particularly given the absence of audited financial statements and the deliberate withholding of management accounts. The court drew an adverse inference from the withholding, finding the application was brought to prevent provisional winding-up orders — a Stalingrad tactic lacking bona fides. On the section 45 defence, the court held that covering mortgage bonds may survive even if the underlying loan is void, as they can secure enrichment claims. The court confirmed that declared opposition by majority creditors (Nedbank and UIF) is relevant to assessing reasonable prospects of rescue, following the Oakdene SCA principle. Identical orders issued across six A1 Group companies. Costs were awarded on the attorney-and-client scale against the applicant.

Legal impact: Confirms several important principles for business rescue practice: (1) applicants must present verified financial information — unaudited, withheld accounts are fatal; (2) business rescue cannot be used as a Stalingrad defence to delay liquidation, and courts will draw adverse inferences from deliberate non-disclosure; (3) covering mortgage bonds are not necessarily extinguished if the underlying loan is void, preserving secured creditor enforcement rights; (4) declared opposition by majority creditors is decisive in assessing reasonable prospects of rescue. The attorney-and-client costs order signals strong judicial intolerance of abusive rescue applications. Practitioners advising secured creditors should note the covering bond analysis as a defence against section 45 challenges.