Insolvent SABC needs capital injection, Zondo commission hears
Johannesburg - The SABC can only be saved with improved government support and capital injection, the Zondo commission has heard.
The chief executive officer at the SABC Mzwamadoda Mxakwe painted a gloomy picture of the crisis facing the public broadcaster and the effort to turn it around from the brink of collapse.
Mxakwe is part of a group of SABC executives that testified at the state capture inquiry in the commission’s investigation of corruption at the organisation.
He said the broadcaster was insolvent and in need of a cash injection. The issues at the organisation are so bad that employees are often worried when payday approaches as to whether their salaries will be paid.
“The SABC is technically insolvent. We look at the short-term liabilities that exceed our liquid assets, we cannot pay our creditors which today stand at R1,8 billion. We have not been able to pay MultiChoice and some of our other creditors,” Mxakwe said.
“We run an organisation where every single month employees are very depressed and they do not know whether they will get their salaries. What we focus on every month is the R265 million that is dedicated to paying salaries. Once we have done that we have nothing left and then we have to get into engagements with some of our creditors. You cannot go on like that, despite the solid strategy we have,” he said.
Mxakwe said when he took over as CEO he understood that there would be a bailout from the government to help the board and executives efforts to grow and turn-around the company. He said there was no other way of making changes without greater government support.
“My understanding when I took the job was that there would be capital re-injection that was expected. It does not matter what strategy you have, if that is not re-capitalisation it cannot work. The only reason the SABC has been able to stay afloat it is the dedication of our employees,” Mxakwe said.
The CEO’s revelations were so disturbing for the chairperson of the commission, deputy chief justice Raymond Zondo, that he asked how the damage at the organisation had been allowed to continue for so long.
“It is very worrying. It is not just the SABC, there are issues with SAA, Denel and Eskom. There have been over the years ministers responsible for these entities and there have been boards and CEOs and CFOs. How did all of this happen when there were all these people. How did we get into a position where state-owned entities have got to this level. It is very worrying. It’s a sense of frustration to say what is it as a country that we got wrong? If so many structures appeared to have failed,” Zondo commented.
The inquiry continues.IOL