Road traffic group: We’re not bankrupt

2012-02-09 21:46
Johannesburg - The Road Traffic Management Corporation (RTMC) on Thursday denied being bankrupt, saying it was only "technically insolvent".

"Our stakeholders, which include partners, sponsors, creditors and the public [are] assured that the RTMC is in a better position now than it was in the past," acting chief executive Collins Letsoalo said in a statement.

"Austerity measures have also been implemented to ensure cost control and future financial sustainability of the entity. For all intents and purposes the corporation remains fully functional."

Letsoalo said the insolvency meant the agency's liabilities exceeded its assets.

"The RTMC is technically insolvent... this is as a result of approximately R200m worth of e-Natis [electronic national administration traffic information system] transaction fees that belong to the national revenue fund which was utilised irregularly by the previous management," he said.

"The matter is currently being regularised through a condonation and write-off process by the Minister of Finance [Pravin Gordhan]."

The Independent Online reported on Wednesday the agency was "teetering on the brink of financial collapse".

Letsoalo told the National Assembly’s transport committee on Tuesday the organisation was insolvent after the National Treasury turned down a request for additional funding.

Its financial crisis was reportedly caused by previous managers and the board, who presided over chronic mismanagement and gross irregularities that culminated in unauthorised spending of about R600m.

According to a report by a task team appointed to investigate the agency, millions were spent on luxury cars, unused office space and unnecessary auditing contracts, it was reported.

The agency, which reports to the transport minister, is responsible for co-ordination of traffic management in the country.

Read more on:    rtmc  |  collins letsoalo
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