BusinessLive reports that the directors of the board of the SA Broadcasting Corporation (SABC) could be declared delinquent because the embattled public broadcaster is trading under insolvent circumstances.
It is technically insolvent and its falling revenues mean it cannot service its debt of almost R2bn. The Companies Act stipulates that it is illegal for directors of an insolvent company to continue trading after they become aware of its insolvent status. The broadcaster is struggling with a huge infrastructure maintenance backlog and an unsustainable wage bill. It has requested a R3.2bn government guarantee to stay afloat and to pay off some of its debt, but its bid for funding has so far been unsuccessful. The Treasury wants the broadcaster to first meet preconditions, such as removing noncore and nonperforming activities, maximising advertising revenues and clawing back expenditure on content. Briefing MPs on Wednesday, CFO Yolandi van Biljon said that in December 2018 the Companies and Intellectual Property Commission (CIPC) issued a notice to the corporation to show cause regarding reckless trading or trading under insolvent circumstances. “A response was provided to the commission, however, the commission indicated that the situation will be monitored closely. CIPC is following up on this matter on a monthly basis,” said Van Biljon.
- Read the full original of the above report by Bekezela Phakathi at BusinessLive
- Read too, State will not ignore crisis at SABC, says deputy minister Kekana, on page 13 of The Star of 29 August 2019
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