Take action against executives responsible for SABC collapse or no bailout: treasury

28 July 2019 - 00:00 By RANJENI MUNUSAMY and MPUMZI ZUZILE
Finance minister Tito Mboweni.
Finance minister Tito Mboweni.
Image: ESA ALEXANDER

The SABC needs to take action against those responsible for causing the state broadcaster's financial collapse if it is to receive any kind of bailout.

As part of the stringent conditions the National Treasury is imposing on the public broadcaster before releasing emergency funding, it says the SABC must investigate the financial meltdown, and report on progress in holding to account people implicated in previous investigations into corruption and mismanagement.

This means that former communications minister Faith Muthambi and former SABC top executives such as Hlaudi Motsoeneng and James Aguma, among others, could face criminal and civil action from the SABC.

The Treasury has sent an exhaustive list of conditions to the department of communications the SABC must comply with to receive progressive tranches of the R3.2bn bailout announced by minister of finance Tito Mboweni.

Other conditions include the identification of noncore assets that can be sold and a timeline of when this could happen, as well as initiatives the broadcaster can take to raise its own revenue.

Treasury director-general Dondo Mogajane confirmed to the Sunday Times that these were among the conditions it is imposing on the SABC as part of its crackdown on state-owned entities (SOEs) constantly requiring rescue funding from the fiscus.

"The support to the SABC will not come without conditions. In March 2019, I wrote to the department of communications where I listed conditions to be met by the SABC before full or part of the resources can be provided. The conditions are aimed at ensuring that the SABC becomes sustainable both financially and operationally," Mogajane said.

"Among the conditions outlined is ensuring that they investigate all issues that led to a near collapse of the entity. The SABC is also expected to come up with revenue enhancement measures that will ensure its financial sustainability. They must also identify noncore assets for sale that will reduce the recapitalisation by government."

Mogajane said Mboweni was insistent that cash injections for SOEs like the SABC, SAA and Denel "would not be handed over all at once but in chunks, as certain conditions are met".

It is not yet known when the SABC will receive its first payment and how much it will be. The Appropriation Bill was approved by the National Assembly this week, but payouts can only be made once it is sanctioned by the National Council of Provinces and signed by President Cyril Ramaphosa. This is expected in the coming week.

Mboweni also announced an additional R59bn over two years to Eskom from the National Revenue Fund through a Special Appropriations Bill to help the debt-ridden power utility meet its financial obligations. This is on top of the R69bn allocated in the national budget in February.

Mboweni has also stated that the Treasury will not provide bailouts to SOEs in future unless a chief restructuring officer (CRO) is appointed to oversee a financial turnaround. The government will appoint a CRO to head a restructuring team at the SABC.

The broadcaster is now under pressure to determine its immediate cash requirements to ensure it is a going concern.

Earlier this month, communications minister Stella Ndabeni-Abrahams told parliament the SABC would receive urgent "interim" financial relief from the Treasury within 10 days, with the balance 45 days after that. However, this did not happen.

A source in the communications department told the Sunday Times that an initial tranche of R500m was expected.

The Treasury is compelling the SABC to devise a turnaround plan to make the state broadcaster financially viable within a specific time. It is also forcing the SABC to act against those who created the financial crisis by asking what action is being taken against those incriminated in investigations by the Special Investigating Unit (SIU), public protector, auditor-general and parliament.

The SIU investigation, which sought to recover at least R33m for the SABC, implicated Motsoeneng, Aguma and other former SABC executives such as Sully Motsweni, Thobekile Khumalo and Gugu Duda.

In her SABC investigation, former public protector Thuli Madonsela also found Motsoeneng guilty of fraud, improper conduct, maladministration and abuse of power.

In early 2017, an ad hoc parliamentary committee that conducted an inquiry into mismanagement at the SABC found that Muthambi "displayed incompetence in carrying out her responsibility as shareholder representative".

It recommended that former president Jacob Zuma fire her, but this was not done.

SABC spokesperson Vuyo Mthembu declined to comment on the Treasury conditions when contacted yesterday.

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