Latest news with #AnooshRooplal
IOL News
22-07-2025
- Business
- IOL News
Funding shortfall jeopardises SA Post Office's business rescue plan
The South African Post Office's business rescue plan is in jeopardy after promised funds have failed to materialise. No further progress can be made in implementing the Business Rescue Plan without additional funding from the Department of Communications and Digital Technologies (DCDT), Messrs. Anoosh Rooplal and Juanito Damons, the business rescue practitioner (BRPs) of the SA Post Office (Sapo) said on Monday in an update. Because of this, the BRPs are consulting with their legal advisors regarding the company's potential exit from business rescue and the subsequent return of the company to its shareholder, the DCDT, along with a new appointed board. Sapo was placed under business rescue on July 10, 2023 to avoid liquidation. They said in an affidavit that they would award funding to the process, which would encompass funding of a first tranche of R2.4 billion (which was received and used for retrenchments packages) and then a second tranche of R3.8bn, which was going to be used for the infrastructure upgrade and digitilisation process. The BRPS were expecting to to get funding in March 2024 but nothing has materialised to finalise the plan and no funding was allocated to the Sapo per the medium-term budget speech. Of note, Communications and Digital Technologies Minister Solly Malatsi announced this week that Sapo will receive R1.8bn over the Medium-Term Expenditure Framework (MTEF), but this is not funding for the business rescue, it is a universal service obligation (USO). Due to this, a freeze has been implemented on all capital expenditure of Sapo and austerity measures were put in place last year. The BRPs said the freeze on capital expenditure included modernizing Sapo's office hardware infrastructure; building infrastructure upgrades; and IT upgrades. Only critical operational expenses are being incurred. The BRPs are continuing to engage with DCDT in relation to other possible alternatives in the interim. They said they were engaging with DCDT on the constituted Joint Sapo, DCDT and National Treasury Strategic Partners/Investment Task Team, however, the Joint Task Team is yet to convene. However, it got temporary relief of R150 million in funds. "The BRPs were informed at a meeting on 21 February 2025 of a possible virement (the process of transferring items from one financial account to another) of funds of R150m from the DCDT for working capital requirements. National Treasury has since approved the virement and the funds were received in March 2025," the BRPs said. "Although this may provide temporary relief for Sapo until the end of April 2025, the funds are not sufficient to substantially implement the Business Rescue Plan and remove the entity from Business Rescue." Additionally, R381m was allocated from the Temporary Employee-Employer Relief Scheme (TERS) in April 2025 to cover salary costs for a period of six months. A further R1.8bn has been allocated for the Post Office to fulfil its Universal Services Obligation (USO). The USO is a policy that ensures basic services, like telecommunications, are available toeveryone, regardless of their location or ability to pay. There is a shortfall to funds required. The BRPs said R3.8bn is still required to pay the remaining dividends to statutory creditors, provide enough working capital to the business, and to invest in certain infrastructure upgrades in order to sufficiently implement its turnaround strategy. Due to this funding uncertainty, the BRPs said they were aggressively focusing on collecting all outstanding debtors and increasing revenues where possible. Meanwhile, an extensive amount of work has gone into preparing a detailed strategy and financial model, and which are considered by the BRPs to be important supporting documents to the business rescue plan. The detailed strategy and financial model set out the turnaround plan and deals with the 'future proofing' component of the business rescue plan. These documents were presented to the DCDT, National Treasury and the Parliamentary Portfolio Committee on Communications and Digital Technologies. The BRPs said they have implemented the Business Rescue Plan to the extent possible despite the funding constraints. "The business rescue plan can only be fully implemented once we receive the funding or part of the funding that was committed by the government," they said. As regards creditor claims and payments, a total of 99.6% of creditor dividends of 12 cents amounting to R1 015bn have been paid on August 31, 2024. The remaining 0.4% of creditors is a combination of disputed claims and unverified landlord queries. Meanwhile, the top-up dividend of 18 cents to statutory and payroll creditors, including SA Revenue Service, the relevant medical aid schemes and the Post Office retirement fund remains outstanding and payment is conditional upon the receipt of the R3.8bn funding from the National Treasury unlessnew conditions are negotiated with these creditors. These creditors need to be paid. BUSINESS REPORT
TimesLIVE
01-07-2025
- Business
- TimesLIVE
About a third of R2.3bn looted from VBS Mutual Bank recovered
Nearly R730m has now been clawed back from the wreckage of VBS Mutual Bank, the South African Reserve Bank's Prudential Authority (PA) said in its latest annual report. A figure confirmed by VBS Mutual Bank liquidator Anoosh Rooplal, this is almost a third of the about R2.3bn plundered through fraud and theft. Advocate Terry Motau's 148-page report — 'VBS Mutual Bank: The Great Bank Heist', released in October 2018 — blew the lid off the looting, leading to 29 criminal cases, with nine matters currently now before the courts. VBS Mutual Bank was placed in final liquidation in November 2018. 'Collection efforts on the loan book are ongoing, with significant progress achieved to date,' the report states. 'The current focus is on securing further recoveries for the benefit of the proven creditors.' Rooplal has already made payments to creditors since taking over the bank's affairs. In 2022, he paid R159m — amounting to 7c in the rand to proven concurrent creditors. In December last year, he paid R458m, which constitutes 20c in the rand. Asked when he will make the next payment, Rooplal said on Monday that it was an ongoing process, 'but the significant dividends have been paid'. The second dividend distribution in December brought the total payments to creditors to R617m, he said at the time. There is no court date yet for the liquidation application of Ithala SOC Limited (Ithala Bank), the PA said in its report. 'The liquidation application is still being ventilated,' the Reserve Bank clarified on Monday. 'The matter will only become ripe for hearing after all parties have filed their respective papers. As such, there has been no communication from the court regarding the outcome of the application.' Lack of co-operation by Ithala In January, the PA filed an application for the provisional liquidation of the entity, alleging that it was unlawfully accepting deposits. Ithala Bank, the Ithala Development Finance Corporation and KwaZulu-Natal's MEC for economic development are opposing the matter. This follows the PA's appointment of a repayment administrator to help transfer the deposits held by Ithala to a registered bank. 'However, the progress was hindered by a lack of interest from registered institutions and co-operation by Ithala,' the PA says in its report. 'The PA and the repayment administrator have since held regular engagements with relevant stakeholders to find a solution for transferring the deposits as quickly as possible in parallel to the liquidation application,' it said. After the PA filed for Ithala's provisional liquidation, the entity's deposit accounts were frozen — according to the Reserve Bank, 'to preserve the funds and prevent it from using depositors' funds for other operational purposes'. But Francois Rodgers, the DA MEC for finance, told Business Times last week that they wanted to interdict the Reserve Bank's liquidation efforts. 'We are in a situation where some depositors have hundreds of thousands that they cannot access due to the liquidation, which is wrong,' he told the paper. Business Day reached out to both Rodgers and his spokesperson but received no response. Business Day previously reported that finance minister Enoch Godongwana approved a R2bn guarantee to Ithala Bank's 223,166 retail depositors. The guarantee would facilitate payments to the depositors by one or more banking institutions to ensure the accounts of depositors can be migrated timeously and funds can be made available. Current risks to the banking sector In her overview, Reserve Bank deputy governor and CEO of the PA Fundi Tshazibana noted that as macroeconomic conditions improved and inflationary pressures subsided, South African banks were likely to see an improvement in their credit risk profiles over the short to medium term. 'However, geopolitical tensions and increased conflicts continue to pose uncertainties and risks to the sector,' she said. 'Globally, there appears to be a growing trend towards deregulation, with an emphasis on reducing capital and other regulatory requirements for banks. As we look ahead, it will be crucial for South African banks to remain vigilant, ensuring strong governance and risk management practices to safeguard the banking system.'
IOL News
12-06-2025
- Business
- IOL News
Scrutiny mounts over R86 million spent on South African Post Office business rescue
According to the AG report, Sapo is not meeting their payment commitments to their creditors, including statutory creditors, resulting in interest and penalties being charged on late or non-payment. Image: Independent Newspapers Archives Parliament's Standing Committee on Public Accounts (Scopa) has expressed serious concerns regarding more than R86 million paid to the South African Post Office (Sapo) business rescue practitioners (BRPs), Anoosh Rooplal and Juanito Damons, since their appointment in 2023. Members of Parliament on Wednesday questioned the revelation of zero consequence management at Sapo as wasteful and fruitless expenditure was sitting above R200 million since 2021. This comes as R152m remains unaccounted for in the current year, with further reports of R136m being written off by the BRPs. "I would like to understand that it is two people, that is already R86m spent on them, please Auditor-General, take us nicely. Did you have sight of what the R86m was paying for? What are the other consultants? What is the period of these people being there," asked MP Veronica Mente-Nkuna. "History has treated us badly with business rescue We saw with SAA that has turned itself around but the busines rescue process did hot have much contribution in turning it around." Executives for the Office of the Auditor-General (AG) clarified that the R86m paid to the two practitioners was regulated with caps and rates on what they could charge for, further explaining that they needed to contract independent expertise. Some of the key things were the actual turnaround plan and implementing the plan as well, They also needed someone on the ground to support management, closing the Section 189 legal involvement, and the involement of other practitioners such as tax, legal, evaluators and others. According to the AG report, Sapo is not meeting their payment commitments to their creditors, including statutory creditors, resulting in interest and penalties being charged on late or non-payment. The fruitless and wasteful incurred for the current year was R152m, however R136m was written off as result of the business rescue process for the current year. Similarly, the opening balance was decreased by R484m as a result of the business rescue process. Sapo's consequence management for fruitless and wasteful expenditure is inadequate, with delayed investigations, poor record-keeping, and weak disciplinary actions, undermining accountability and allowing financial inefficiencies to persist, the AG reported. "What is the Sapo's culture around fruitless and wasteful expenditure is marked by weak accountability, poor financial management—such as entering contracts without cash flow confirmation—and a tolerance for inefficiency, resulting in repeated financial losses," noted the AG report.. "Its consequence management is reactive and permissive, with delayed actions often justified by financial difficulties, undermining effective financial control." The AG said weak internal control environment around cashflow management, ineffective contract management, and lack of accountability were the main contributing root cause to the culture Sapo's fruitless and wasteful expenditure. Cash flow constraints further delay payments, leading to avoidable costs such as interest and penalties. The AG said weak consequence management stemmed from lack of leadership and oversight, delayed investigations, inadequate disciplinary action, and poor record-keeping of evidence supporting fruitless and wasteful expenditure cases, often excused by financial difficulties. The AG said executive management must enforce accountability on all responsible officials accountable for financial decisions and contract management through capacitating the Financial Misconduct Committee (FMC) in order to change the culture of fruitless and wasteful expenditure. It also recommended that the board to be appointed should strengthen oversight over the FMC, and the Department of Communications and Digital Technologies, together with the board, should ensure strict monitoring and consequence management. BUSINESS REPORT
The Citizen
29-05-2025
- Business
- The Citizen
Post Office rescue plan is working, but more money is needed
Three creditors still need to be paid a combined amount of R509 million. Pensioners queue outside the Post Office in Westgate, awaiting their payouts. Picture: Devina Haripersad The Business Rescue of the South African Post Office (Sapo) is nearing completion, and the practitioners reported back positive results to parliament. However, a bumpy ride is still ahead. Business Rescue Practitioner (BRP), Anoosh Rooplal and Juanito Damons told the parliament's Communications and Digital Technologies committee that they are 75% done with the handover process to the shareholders of Sapo on Wednesday. However, they need to devise a plan to address outstanding creditors. ALSO READ: More millions to save jobs at SA Post Office Post office debt The committee was told that the Post Office was unable to receive R3.8 billion. Therefore, they are still in discussions with the department regarding an alternative plan to settle outstanding creditors. The creditors that still need to be paid are the South African Revenue Services (Sars), the Pension Fund, and Medipos. The three need to be paid a collective of R509 million. For the financial year 2024-25, the practitioners were able to pay creditors a total of R1 billion. Post office successes The committee was informed that, for the first time since 2012, Sapo had a positive balance sheet with a net asset value (NAV) of R1 billion. Sapo was placed under provisional liquidation in 2023, but thanks to the work of Rooplal and Damons, the entity has been discharged. 'The BRPs applied to have the provisional liquidation order discharged. The matter was heard on 22 November 2024, and the provisional liquidation order was discharged.' The entity is currently paying its liabilities in the ordinary course of business. ALSO READ: Ramaphosa signs Post Office Bill into law Retrenchments The practitioners stated that they issued 4 875 termination letters for employees who were affected by the retrenchment. 'All affected employees' notice period ended on 30 April 2024, and 4 342 employees were retrenched.' Sapo reported that year-on-year expenses of R2.7 billion were reduced by R2 billion, with staff costs being the main contributor to this decrease. As of 31 March 2025, Sapo had 5 592 employees. Additionally, the entity reduced the number of operating branches to 657. Sapo receives money The entity received R150 million from the Department of Communications and Digital Technologies in March 2025. When it comes to revenue, the entity reported year-on-year revenue of R1.7 billion, a decline of R700 million. They attributed this decline to a lack of investment in infrastructure. Achievements The BRP outlined the following goals to be achieved: Improving cash management processes Creditor Compromise Completion of S189 payments (final tranche of settlements) Achieved a target of 657 branches Employee reduction, R1.2 billion annual cost savings Data Centre Migration They are in the process of achieving the following goals: Investment in fleet management systems Strategic partnerships Appointing suitably qualified, skilled and competent management and directors Outstanding goals Statutory and payroll creditors Hardware infrastructure and software applications modernisation Investment in sales and business development team for bulk mail segment Strategic and equitable partnership implementation NOW READ: Parliament discusses SA Post Office's fate a month after 'day zero'
Eyewitness News
29-05-2025
- Business
- Eyewitness News
Business rescue practitioners tells Parliament task to save struggling Post Office a success
CAPE TOWN - The South African Post Office (SAPO)'s business rescue practitioners have told Parliament their task to save the struggling entity has been a success. They told Parliament on Wednesday that the South African Post Office has seen the first positive balance sheet with a net asset value of R1 billion - the first since 2012. But the turnaround has come at a huge cost, with more than 4,000 employees retrenched and hundreds of branches closed, affecting poor and rural communities. The Post Office was placed under provisional liquidation in February 2023, and a few months later, Anoosh Rooplal and Juanito Damons were appointed as the joint business rescue practitioners. They told the communications and digital technologies committee that they've reached a point where they can start planning their exit. Rooplal said the process has yielded a lot of positive results. "This certainly has been a complex business rescue process; it hasn't been easy, but nonetheless, much progress has been made since our appointment." He said the entity has also resolved its debt problem, which amounted to billions. "Effectively, we're handing back an entity, a Post Office… that's virtually debt free." The rescue team told the committee that the Post Office still needs a cash boost after being denied a R3.8 billion bailout by Treasury in 2024. ALSO READ: Mashatile says govt not ready to let go of cash-strapped Post Office yet
