Communications minister Solly Malatsi was caught in the crossfire of MPs and business rescue practitioners after a letter revealed plans to seek the liquidation of the SA Post Office.
On Friday, Haroon Laher of Fasken — the business rescue practitioners tasked with the business rescue process of the Post Office — sent a letter to Malatsi and deputy minister of communications Mondli Gungubele, saying liquidation was the only way forward if the Post Office did not receive a cash injection.
MPs in the portfolio committee on communications and digital technologies received and saw the letter as Malatsi was briefing them on Friday afternoon.
This adds a twist to the Post Office business rescue process, which has cost R12.6m in business rescue practitioners’ fees, R220.1m in consultants and specialists, and R27.9m in external advice since the 2023/24 financial year.
As Malatsi was briefing the portfolio committee, members who got sight of the letter turned to question him about it and his views on it.
ANC MP Shaik Imraan Subrathie pointed out that the letter was circulating while the minister and the business rescue practitioners were briefing the committee, apparently without having seen the letter himself.
“I am concerned that we are proceeding to get a briefing from business rescue practitioners whilst the executive authority, the minister himself, has not had sight of this letter,” Subrathie said. “From what it appears, this letter must have been circulating in the last hour while the minister has not had sight of it.”
Committee chair Khusela Sangoni referred to Malatsi, who confirmed that the letter had just landed in the department’s inbox. Previous correspondence between the business rescue practitioners and the department raised the importance of the Post Office receiving a cash injection.
“I can’t express views on it because I haven’t read it; I haven’t studied it,” Malatsi said. “But it’s just now being shared with me as a result of the alert that the DM [deputy minister] shared with the rest of us.”
DA MP Tsholofelo Katlego Bodlani said the emergence of the letter reflected a complete disregard for the office of the executive committee’s engagements with the department regarding the fate of the Post Office.
“Was it not prudent of them [business rescue practitioners], as a courtesy, at the very least, to pick up the phone and inform the minister of their decision, so that we do not sit here trying to figure out if there is a chicken-or-egg situation? This is total disregard and disrespect for processes as well,” she said.
In the letter that caused the stir, Laher told Malatsi and Gungubele that, as indicated in February, the continuation of the business rescue proceedings of the Post Office depended on it remaining in a commercially solvent position and being able to discharge its operational liabilities incurred during business rescue.
“The business rescue practitioners have consistently advised that it would be legally impermissible and reckless to continue trading in circumstances where [the Post Office] would be unable to meet its debts and obligations as they fall due,” the letter said.
“In that context, the business rescue practitioners advised that, unless confirmation was received…regarding the provision of the necessary financial support to address [the Post Office’s] immediate cashflow requirements, the business rescue practitioners would have no option but to institute proceedings to terminate the business rescue and to convert the business rescue proceedings into liquidation.”
The letter said no confirmation was received on cashflow provisions and that the business rescue practitioners have resolved to proceed with an application to court seeking an order terminating the business rescue proceedings and placing the Post Office into liquidation.
It is my view that any talk of liquidation at this stage is premature...
— Solly Malatsi
After the committee meeting, Malatsi said in a statement: “It is my view that any talk of liquidation at this stage is premature given the extensive ongoing conversations within government, particularly between the department and National Treasury, regarding the prevailing situation at the post office.”
Cosatu’s parliamentary coordinator, Matthew Parks, said the ANC-aligned labour federation rejected proposals to liquidate the Post Office.
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