A high-stakes legal battle is brewing in South Africa, pitting a black woman-owned gas distribution company against a subsidiary of Remgro, the firm controlled by billionaire and South Africa's richest person Johann Rupert.
Zaza Gas, owned by Johannesburg-based Zimbabwean businesswoman Zandile Chiwanza, is suing Air Products, a Remgro subsidiary and the largest industrial gas producer in Southern Africa, for a staggering R29 million following the abrupt termination of their business contract. The case highlights concerns about fair business practices and the impact of such disputes on black-owned businesses.
The lucrative seven-year contract, secured by Chiwanza in September 2018, was to commence on 1 October 2018, giving Zaza Gas exclusive rights to distribute and sell Air Products' gases at a pre-determined price. This agreement, according to court documents, was set to continue beyond the initial seven-year term unless terminated with 12 months' written notice from either party, effective on the contract's anniversary date. The termination of this agreement, however, has left Zaza Gas facing significant financial losses and reputational damage.
Air Products, a significant contributor to Remgro's earnings – contributing R476 million to headline earnings in 2023, according to Remgro's annual financial results – terminated the contract in March 2024, citing allegations of theft by Zaza Gas. This claim, however, is vehemently denied by Chiwanza, who alleges that the accusations are unfounded and are being used to justify the termination of a profitable contract. The value of Air Products itself is estimated at around R10 billion, underscoring the scale of the company involved in this dispute.
Zaza Gas's legal representatives have responded forcefully to Air Products' termination, stating in their response: “The attempt at termination by the defendant… unequivocally shows that the defendant doesn’t deem itself bound to the distributor agreement and that it will no longer perform under the distributor agreement.”
This statement highlights the legal basis of Zaza Gas's claim, arguing that Air Products' actions constitute a breach of contract. The legal challenge is not simply about financial compensation; it's about upholding the terms of a legally binding agreement.
Beyond the financial losses, Chiwanza is also seeking R5 million in compensation for reputational damage. She accuses Air Products of spreading false information to Zaza Gas's clients and the wider gas industry, claiming that the termination was due to fraud and theft.
Chiwanza's legal team argues that: “[Air Products] knows the allegations of theft/fraud to be false… notwithstanding the falseness of the allegation, continued to distribute the falsehoods about [Zaza Gas] with the intent to damage its reputation.”
This accusation adds a significant layer of complexity to the case, raising questions about Air Products' business ethics and conduct.
Chiwanza herself has raised further questions about the alleged theft, questioning why those involved – including Air Products' dispatcher, security guards, and Zaza Gas's driver – were not arrested if theft had occurred.
She also highlights the lack of consultation with Zaza Gas at the time of the alleged incident, further supporting her claim that the allegations are unfounded. The eight-month delay in identifying the allegedly stolen material also raises questions about the timing and veracity of the accusations.
The legal battle has taken a significant toll on Chiwanza and her family, placing a considerable strain on their finances. She has publicly appealed for pro bono legal assistance, highlighting the financial burden of fighting a large corporate entity.
Zaza Gas, which employed 40 people and generated monthly revenue between R4.5 million and R6 million, served over 5,000 customers before the contract termination. The potential loss of income and employment for these individuals underscores the broader consequences of this dispute.
In response to inquiries from Sunday World, Air Products stated: “The matter you refer to is currently the subject of ongoing litigation between Air Products and Zaza Gas. Air Products is confident that it will be successful with this litigation, but it does limit our ability to respond to your query in any degree of detail…
"That said, we wish to place on record that Air Products respects and values its contractual relationships with all partners and stakeholders and is committed to the lawful and ethical enforcement of its rights in this regard. We do not practise or tolerate any form of unfair discrimination. We deny that our conduct and policies are in any way contradictory to these values in any of our dealings, including those with Zaza Gas.”
