Post Office stumps up R50m over sour deal

Failure to honour an agreement signed 11 years ago with Nasasa Cellular has become a costly blunder for the South African Post Office, which was ordered to pay R50-million into a trust account held by the sheriff this week.

The Post Office's bank accounts may be raided further if it fails to pay an additional R1.3-million or more in interest and costs by Wednesday.

Khulani Qoma, a spokesman for the Post Office, confirmed the payment of the R50-million guarantee.

The deposit was made "to ensure that it is clear that the ongoing legal process is not a result of the false claims that we are unable to pay the R50-million but precisely because we believe there are issues of legal non-compliance that underpin this matter and wish for the courts to address these".

Qoma would not elaborate on allegations of fraud in the deal with Nasasa Cellular, saying the matter was sub judice.

Bernard Hotz, an attorney for Nasasa Cellular, said the Sandton North sheriff had confirmed that the R50-million had been paid but said interest and costs were outstanding.

"If they fail to pay by Wednesday [the sheriff] will instruct the banks to pay," Hotz said.

These additional costs exclude attorney fees for last week's urgent application, which could run into hundreds of thousands of rands.

Hotz said he was still calculating the amount.

The Post Office signed a settlement with Nasasa Cellular in September last year, agreeing to pay R50-million for reneging on a deal it struck in 2004, after dragging the matter through the courts for years.

The plan was to sell cheap cellphones through 1250 Post Office branches.

The settlement was to be paid in three instalments starting in October but the Post Office failed to honour this undertaking.

The settlement was declared a court order in January and last month the high court granted Nasasa a warrant of execution to attach and freeze the Post Office's bank accounts.

The parastatal's accounts at four banks were duly frozen but this did not affect Postbank customers, who were still able to withdraw their money.

Last Friday the Post Office lost an urgent application to overturn these orders in the North Gauteng High Court.

It said it would ask the court later to set aside the settlement agreement because there was alleged fraud involved.

It is unclear where the Post Office obtained the money from to pay into the sheriff's account.

In court its advocate argued that the Post Office needed access to its bank accounts to pay employees last weekend.

Qoma said staff were paid from "our trading income using our bank accounts as normal".