SABC admits it has completely collapsed

The Companies and Intellectual Property Commission (CIPC) has issued a notice to the SABC, requesting that the broadcaster explain why it believes it is not trading recklessly under insolvent circumstances, according to City Press.

The notice reportedly states that the SABC’s liabilities exceed its assets by R1.8 billion, leading to the prevention of the public broadcaster settling its short-term obligations.

The SABC’s Neo Momodu told the City Press that the broadcaster has “completely collapsed”, and attributed its financial ruin to irregular spending by previous management – namely former COO Hlaudi Motsoeneng.

“The SABC would like to make it clear that Mr Motsoeneng was the central figure in the complete financial and governance collapse of the corporation which the current executive management is redressing,” Momodu said.

According to Momodu, a response to the CIPC notice is being prepared, but the broadcaster could face being forced into business rescue or even be shut down if the CIPC is not satisfied with the company’s ability to continue trading.

According to sources within the SABC, the broadcaster has previously had to seek aid from Johannesburg mayor Herman Mashaba to continue operating, and its advertising revenue continues to fall as it is unable to afford new shows or pay its TV production houses on time.

The report also stated that the SABC will argue to the CIPC that it is trading with the understanding that Treasury will provide it with a bank guarantee for a loan for its turnaround plan.

CIPC spokesperson Tshiamo Zebediela said the notice issued to the SABC was a proactive enquiry by the commission, and that it may be withdrawn if some form of turnaround strategy is outlined by the broadcaster.

[Source: City Press]

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