Broke ANC faces poll ban as creditor owed R102m threatens to send in the sheriff

The ANC is at risk of being declared insolvent and being liquidated if it continues to ignore paying the R102 million it owes to Ezulweni investments, which has accumulated more than R40 million in interest at the cost of R900 000 per month since 2019.

Liquidation would mean the ANC could be disqualified from contesting next year’s elections.

Company supplied campaign materia but was not paid

Ezulweni supplied the ANC with campaign material for the 2019 elections but was not paid for its work. It later approached the courts to force the ANC to pay.

In June, ANC secretary-general Fikile Mbalula, who was head of elections in 2019, denied knowing or ever contracting Ezulweni. He threatened that the party intended to open a criminal case to challenge the court application by Ezulweni.

The ANC has maintained throughout that it has no contract with Ezulweni.

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The Supreme Court of Appeal last week upheld the decision by the High Court in Johannesburg, which ruled against the ANC, and told the party to pay what was owed to Ezulweni.

Sheriff of the court would serve the ANC with a writ of attachment at Luthuli House

Ezulweni attorney Shafique Sarlie told The Citizen the sheriff of the court would serve the ANC with a writ of attachment at Luthuli House and start the process of attaching the party’s bank accounts.

Sarlie said they would attach removables – like furniture and vehicles – and if this did not satisfy the quantum of the debt, they would then attach immovable assets, which could be Luthuli House.

“It is important to remember that if the debt is not completely repaid, we can liquidate the ANC,” he said. “I believe that can arguably disqualify the ANC from contesting the next elections.”

The documents allowing the sheriff to attach property and bank accounts covered the debt of R102 million and interest, which was already at R40 million and increasing by R900 000 a month.

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Sarlie said if the money the ANC had was not sufficient and the sheriff issued a nulla bona return – meaning there is not enough property to cover the amount owed – then it was open to insolvency proceedings.

“That would be a huge danger for the ANC.

“I don’t imagine it will get there,” he said.

“Let’s say in their bank account they have a few hundred million rand, it might be subject closed and we stop there.”

He said at this point, the ANC would not be allowed to contest the matter.

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“The only last step would be to go to the Constitutional Court (ConCourt). They would have to do an application for leave to appeal in terms of the ConCourt rules. That rule says you have to have a constitutional matter.

“The ANC has never raised a constitutional point – there is no constitutional matter,” he said.

Even if the ANC did that, it would not stop Ezulweni from bringing an application in terms of Section 18 of the Superior Court Act to execute, despite the “frivolous” appeal to the highest court.

‘No reason to register a party for the elections if it was under liquidation’

Electoral Commission of South Africa spokesperson Kate Bapela said there would not be any reason to register a party for the elections if it was under liquidation.

“Early next year we will issue requirements for parties to contest an election. We will not have any party undergoing liquidation contesting an election,” she said.

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ANC spokesperson Mahlengi Bhengu-Motsiri told The Citizen the party was still engaging with its legal team and would communicate its position after considering legal advice.

Ironic that the ANC was running the country but could not run its own offices

Political analyst Dr Ralph Mathekga said it was ironic that the ANC was running the country but could not run its own offices.

It was now a matter of how the ANC could mitigate the damage of going to elections facing liquidation.

“They are promising they will resolve challenges in the country – it is very ironic.”

Despite financial challenges the party faces, it might make last-ditch efforts to pay Ezulweni.

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“This thing of the disclosure of party finances, that has made it difficult for them to get away with illicit funding from people who might have benefitted or expect to benefit from the government.

“They are under stress and whoever is going to bail them out, it has to be made openly.

“Gone are those days where we would hear somebody has paid and we do not know who.”