SABC has ‘completely collapsed’, is ‘insolvent’ and ‘trading recklessly’

The South African Broadcasting Corporation (SABC) has been served a notice by the Companies and Intellectual Property Commission (CIPC), City Press reports.

The notice accuses the SABC of “trading recklessly under insolvent circumstances”, and gives the struggling broadcaster 20 business days to defend itself in response.

According to the notice, the broadcasters liabilities exceed its assets by R1.8 billion, leaving it unable to settle its debts.

SABC’s new group executive of corporate affairs and marketing, Neo Momodu, told City Press the broadcaster has “completely collapsed”, and was clear at whose feet the blame lies.

“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.

While Motsoeneng, who recently launched his own political party, the African Content Movement, and announced that he will be attempting to contest the 2019 presidency, has consistently maintained that he did a good job while in charge at the broadcaster, the bills for his constant legal battles and the failure of his 90 percent local content quota are among the factors believed to have led the SABC towards the brink.

The corporation had to fork out R22 million to defend Motsoeneng in court during his reign as COO.

In a parliamentary reply to Democratic Alliance MP Thomas Hadebe in March, then communications minister Mmamoloko Kubayi-Ngubane revealed that Motsoeneng was a respondent in no fewer than 15 different cases in the 2013/14 financial year.

His legal battle against the DA over the public protector’s report into governance failures at the public broadcaster – “When Governance and Ethics Fail”– led to the SABC footing Motsoeneng’s legal bill of R5.3 million.

Other spending included R4.9 million in litigation on “various SABC board matters”, R1.6 million against the Helen Suzman Foundation and R1.1 million in a case against journalist Vuyo Mvoko.

If it can’t convince CIPC that it is able to continue trading, the SABC will be forced into business rescue mode or a complete shutdown.

Just over a month ago the broadcaster announced that due to its financial woes, it envisaged that 981 employees and 1200 freelancers may possibly be retrenched as a result of the restructuring, across all the business units and operations of the broadcaster.

Several resignations recently rocked the broadcaster’s board, some as a result of these proposed retrenchments.

(Additional reporting by Brian Sokutu)

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