Sentech 'out of cash by November'

Sentech, the company responsible for bringing TV broadcasts to South Africans and which is on the verge of financial collapse, granted more than R117-million in contracts that did not go to tender over a period of two years.

The company is also battling to collect R27-million owed to it by government departments and community radio stations. It is also struggling to pay the R850000 monthly rental on its head offices in Fourways, north of Johannesburg.

The company's plan for 2010-11 shows it could be out of cash by November. The plan, which the board was meant to present to parliament's portfolio committee on communications two weeks ago, shows 58 irregular contracts awarded and paid out for the "provision of goods and services" without having gone to tender.

The biggest of these deals is worth about R31-million.

Spokesman Nthabeleng Mokitimi said on Friday that Sentech was investigating how the contracts were awarded without going to tender, a violation of the Public Finance Management Act.

Of the R27-million owed to it, R15.5-million is 90 days overdue.

Sentech refused to name the government departments or stations that owe it money.

The report also states that Sentech is collecting only 70% of money due to it each month and acknowledges that at this rate its cash will be "depleted by November".

Sentech has threatened to block signal service against all those owing it money.

The company has been running at a loss since last year, and a task team has described it as "rudderless, inadequately funded and misdirected".

According to the Treasury's 2009 Estimates of National Expenditure, taxpayers have bailed out Sentech to the tune of R980.9-million to date. Another R279-million "transfer" has been budgeted in the 2011-12 financial year.

Last year, Sentech dodged R13-million in tax owed on government grants and still managed to pass a 10% increase for its three executive directors, who were paid R4.9-million in total.

Chief executive Sebiletso Mokone-Matabane resigned in March, following accusations of gross mismanagement.

Acting CEO, Beverly Ngwenya, was appointed by minister of communications Siphiwe Nyanda in April, but she resigned just three months later when charges of gross negligence and reckless spending were brought against her and the company's chief financial officer, Mohammed Cassim.

The Sentech board was supposed to present the strategic plan to the communications portfolio committee on August 31. But angry MPs refused to hear them out because they had only received copies of the presentation that morning.