Sassa grants beneficiaries queue outside Sharpeville Post Office in Johannesburg on 15 January 2021. Picture; Nigel Sibanda
Having failed to pay its creditors, Sapo was placed into provisional liquidation this year but Communications Minister Mondli Gungubele brought an urgent application on 30 May to place it in business rescue. Business rescue was introduced into SA legislation under the Companies Act, becoming effective in 2011, with a view to saving and restructuring, rather than liquidating, companies deemed to have a reasonable chance of survival.However, independent economic analyst Bonke Dumisa said Sapo was a serious financial drain on government coffers. The pouring of more money into the Post Office had always been like “throwing good money into a bottomless hole”.
Under a business rescue process, creditors owed more than R5 billion could recoup some of the money they are owed. The government expected creditors to be paid 10 cents in the rand under a business rescue process. It argued a bigger loss under liquidation was expected, as creditors stood to receive 4c in every rand owed.SABC chief financial officer Yolande van Biljon recently warned that the public broadcaster might have to apply for business rescue to avoid liquidation.
“It cannot deliver services. It’s the old problem, with people without capacity and low working ethics. You will find a lot of cadres in the system,” he said.