File picture: ANA/Karen Sandison
File picture: ANA/Karen Sandison

Debt-ridden SABC faces slew of lawsuits

By Siyabonga Mkhwanazi Time of article published Oct 6, 2019

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Cape Town - The SABC is facing lawsuits to the value of R1.3 billion as it buckles under the pressure of a cash crunch.

The public broadcaster reported in its financial statements that the civil claims were from individuals and entities for a number of disputes.

The Government Employee Pension Fund (GEPF) has filed the biggest lawsuit, for R760 million, over a lease deal that went sour.

The SABC has also been sued for R185m by a bidder over a contract awarded to another company.

Another broadcaster has filed a civil claim of R30m against the SABC over the termination of a contract.

In other claims, the SABC is being sued by former employees for breach of contract.

On the GEPF lawsuit, the SABC said the matter had been due to go on trial.

“The GEPF, represented by the Public Investment Corporation, instituted a claim of approximately R337m including interest against the SABC for the cancellation of a purported lease agreement for certain assets previously leased by the Bophuthatswana Broadcasting Corporation between 1997 until 2011. Accruing from the maximum interest that can be charged, the possible loss is R760m. Legal proceedings are ongoing and the matter was set down for trial on July 31, 2019,” said the SABC in the report.

The SABC is also fighting another company over a security contract worth more than R185m.

“This matter results from a security tender awarded at a total cost of R185 519 425.16. On December 15, 2017, the SABC was served with a notice of motion from a losing bidder requesting among others that the appointment of the winning bidder be set aside and that the applicant be substituted as the bid winner. Should the applicant succeed in this litigation, the SABC will be liable for the full contract amount,” it said.

The SABC is in court with another broadcaster for millions of rand.

It said the broadcaster had proposed a final settlement of R30m on the matter.

The claims against the public broadcaster come at a time it has been battling with its finances.

Communications Minister Stella Ndabeni-Abrahams announced a bailout of R2.1bn to cover its immediate costs.

The SABC has not had a profit in the past few years. It has incurred huge losses in the past six years.

In the report, the SABC incurred a loss of more than R400m for the past financial year.

The public broadcaster said as part of its strategy to recover from its current financial position it would need to increase television licence fees to get more money and that pay channels who use its channels must pay for the costs.

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