With a view to improving: Broke SABC hopes to be financially viable in 3 years

2018-12-31 14:04
A general view of the SABC headquarters on July 11, 2014 in Johannesburg. (Photo: Gallo Images)

A general view of the SABC headquarters on July 11, 2014 in Johannesburg. (Photo: Gallo Images)

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Financially unstable, operating under insolvent circumstances, and broke, are just some of the words which have been used to describe the South African Broadcasting Corporation (SABC).

It has been a disastrous financial year for the public broadcaster.

SABC spokesperson Neo Momodu recently said the broadcaster had "completely collapsed", and attributed its financial ruin to irregular spending by previous management – namely former Chief Operating Officer (COO) Hlaudi Motsoeneng, City Press reported.

But that is not all that is wrong with the public broadcaster.

It has also been marred by sexual harassment allegations involving some managers, with some employees making allegations of "sex for jobs".

READ: SABC suspends 'sex-for-jobs' pests

In October, an inquiry looking into such claims found that the broadcaster has on numerous occasions swept the sexual abuse cases under the carpet, and failed to act properly to address the matter.

READ: Sexual harassment cases at the SABC swept under the carpet - commission

The inquiry also found that the SABC did not take sexual harassment seriously, and needed to develop a culture that embraced the enhancement of human rights and gender rights.

That all signalled an SABC in chaos, with its finances in such disarray, that it had announced, through its COO Madoda Mxakwe in Parliament, that it may not be in a position to pay salaries come March 2019.

That brought about uncertainty with employees, who initiated pickets across the country, urging the SABC to find alternative ways of funding.

But that noise has died down for now, with December bonuses paid out to the workers.

Two employees told News24 that they were still uncertain about their future.

"Yes, we have received our 13th cheque, but that does not give us job security," said one worker.

Another said that she was "confident that the there will be no retrenchments, and was looking forward to growing my career in the media industry".

Momodu, however, said the broadcaster was going ahead with proposed cost cutting measures, which include the "optimisation of employee costs to revenue, optimisation and reprioritisation of capital expenditure and investments, and reduction of general operating expenditure".

ALSO READ: Low staff morale, fear and anger at the SABC

A new minister of communications, Stella Ndabeni-Abrahams, came on board in November. She wrote a tough letter to the SABC board, warning against the looming retrenchments.

"We realised that the board was no longer acting in the interests of the company, the shareholder, and Parliament as the representative of [the] South African public, to which the SABC board is accountable," parts of the letter reads.

The total cost to company of the top three executives at the SABC was R12.1m, it was revealed in Parliament earlier this year.

READ MORE: SABC's financial woes deepen

The chief executive officer (CEO) earns a remuneration package of R 5.1m‚ while the chief operations officer (COO) earns R4m and the chief financial officer (CFO) takes home R3m.

The three salaries amount to 1.1% of the company's salary bill.

Meanwhile, workers have told News24 how they fear for their jobs, after the SABC announced that it would be retrenching almost a thousand members of its work force, and some 1 200 freelancers.

Mxakwe told staff in September that "the corporation had had a demanding financial year, with a total revenue of R6.6bn against a budget of R7.3bn, which resulted in an under-performance of R709m. One of the SABC's biggest cost drivers is the salary bill".

Mxakwe said the corporation generated R7.2bn in revenue, with a salary bill of R3.1bn.

He said that, if the SABC was a private company, it would have been recapitalised.

Controversial tender

The SABC's interim board had furnished the Special Investigating Unit (SIU) with documents relating to a controversial R185m security tender deal. The board had maintained that the deal with Mafoko Security Patrols was all above board.

Mafoko had come in second to, and more expensive than, Mjayeli Security Services, which initially won the bid.

One of the reasons which may have been put forward to explain the awarding of the tender, may be that Mafoko had a higher BEE compliance rating than Mjayeli.

The SIU says it has discovered irregularities in the awarding of the contract.

Four members of the SABC board – who were also members of the interim board that had awarded the tender before their permanent appointments – resigned in December.

They included Krish Naidoo, Khanyisile Kweyama, John Matisonn and Mathatha Tsedu.

They, however, indicated that their decision had nothing to do with the SIU investigation, or the letter from Ndabeni-Abrahams, amid speculation of political interference.

READ: SABC bosses asked to steer ship in best interest of SA in wake of crippling resignations

With the SABC board members numbers being slashed from 13 to eight, and leaving those present without a quorum, Parliament's committee on communications has instructed SABC management to take over the board's responsibilities, until all five vacancies have been filled.

The other vacancy was created when Victor Rambau tendered his resignation in June.

Is that all that's gone wrong at the broadcaster? Unfortunately not

The struggling public broadcaster has been given 20 days, from December 23, to respond to the Companies and Intellectual Property Commission (CIPC), where it should explain why it believes it is not trading recklessly under insolvent circumstances.

The SABC's liabilities exceed its assets by R1.8bn, according to the notice which was served on December 20, and, "as a result, the SABC is not able to settle its short-term obligations".

Momodu said that the key to a better SABC was "the enforcement of sound governance procedures aimed at re-establishing a culture of accountability, ownership and responsibility in the public broadcaster".

"The current executive management, while dealing with the financial consequences of well-documented governance failures, have developed and are implementing a multi-faceted turnaround strategy."

ALSO READ: Communications committee invites nominations to fill SABC board amid turmoil

The question now remains if government will do for the SABC what it has done for South African Airways (SAA) and power utility Eskom, and dig deep for a bailout in the billions.

While South Africans wait for first word on the matter, employees remain uncertain about their futures, while others have already started handing out CVs to prospective employers, should the axe fall.

The SABC's "aim for the next three years is to return to a financially sustainable position, in order to ensure that it is able to operate competitively in the evolving digital landscape, whilst delivering on its mandate of providing a range of compelling programmes through its television, radio and digital platforms", said Momodu.

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