Mohamed, the former owner of SA Steel Mills, was taken into custody on Tuesday, according to sources with direct knowledge of the matter. The detention marks a significant development in an ongoing saga surrounding the company's collapse and subsequent legal disputes that have rattled South Africa's industrial sector.
Detention Confirmed by Sources
The sources, speaking on condition of anonymity because they were not authorised to discuss the matter publicly, confirmed the detention occurred at a police facility in Johannesburg. The exact charges were not immediately disclosed, though investigators have been examining SA Steel Mills' financial dealings for several months. Court records in Gauteng show multiple applications linked to the company's affairs were filed over the past 18 months.
SA Steel Mills Collapse and Aftermath
SA Steel Mills once operated three manufacturing plants across South Africa, employing roughly 1,800 workers before entering business rescue proceedings. The company filed for protection from creditors in early 2023 after accumulating debts exceeding ZAR 4.2 billion. Creditors have since pursued legal action to recover funds, with liquidators appointed to oversee the wind-down of operations.
The collapse sent shockwaves through South Africa's steel industry, a sector that contributes approximately 1.5 percent to the country's gross domestic product. Local municipalities and construction firms that relied on SA Steel Mills products faced supply disruptions and contractual disputes.
Workers Left Reeling
Former employees staged demonstrations outside the company's main plant in Vanderbijlpark, Gauteng, demanding outstanding wages and severance payments. Many workers had not received salaries for three months before the business rescue application. The National Union of Metalworkers of South Africa described the situation as a betrayal of thousands of families who depended on the mills for their livelihoods.
Investigators Focus on Financial Conduct
Authorities have been scrutinising transactions made in the final months before SA Steel Mills entered business rescue. Liquidators flagged several payments to related entities that they claimed lacked commercial justification. The Serious Economic Offences Unit within the South African Police Service has been handling aspects of the investigation, according to one of the sources.
Legal Proceedings Expected
Mohamed is expected to appear in the Vanderbijlparp Magistrate's Court on Wednesday for a formal bail application. Prosecutors indicated they will oppose bail, citing flight risk concerns given the scale of alleged financial irregularities. The case has drawn attention from parliamentary oversight committees who have requested briefings on the collapse's impact on industrial policy.
Industry-Wide Implications
The detention raises questions about corporate governance standards within South Africa's steel sector. Industry analysts point to rising input costs, particularly electricity prices which increased by 18 percent annually for industrial users, as contributing factors to the company's viability challenges. However, they stress that poor financial management, not external pressures alone, drove the collapse.
Competitors have moved quickly to absorb some of SA Steel Mills' former customer base. ArcelorMittal South Africa announced plans to increase capacity at its Vanderbijlpark facility in response to market demand, though the company has not commented on whether former SA Steel Mills clients have approached them.
What Happens Next
Watch for the bail hearing scheduled for Wednesday. The outcome will determine whether Mohamed remains in custody while investigations continue. Liquidators are expected to file their final report within 60 days, which may reveal additional details about the company's financial trajectory. Parliamentary hearings on industrial policy failures tied to the SA Steel Mills case are slated to begin next month.
