The cash crunch afflicting the SABC has now affected its service providers, who have been unceremoniously informed that they will not be paid for July.
SABC spokesperson Kaizer Kganyago confirmed to The Star on Wednesday the authenticity of a letter written by the broadcaster’s group executive for television, Nomsa Philiso.
In the note dated July 30, Philiso cited the SABC’s short to medium-term pressure “in respect of cash flow due to the current liquidity challenge experienced”, for service providers not receiving their payments last month.
According to a highly placed source, at least five well-known TV production houses producing some of the SABC’s biggest money spinners haven’t been paid. The withholding of payment has apparently necessitated producers to approach banks for loans in order for them to remain afloat.
This comes on the back of The Star’s report in March that the public broadcaster was owed R25.5 billion in TV licence fees over the past three years. This caused the SABC to write off more than R4.5bn of unpaid debts of over a million “invalid” accounts in the 2016/17 financial year, according to a written response to Phumzile van Damme, the DA MP who is the party’s parliamentary spokesperson on communication.
In its annual report for the 2016/17 financial year released in September, the SABC posted a net loss after tax of R977 million, where the organisation said it “experienced financial constraints owing to revenue streams deteriorating at a rate of 6% higher than cost reduction”.
“Cash and cash equivalents as at the end of the 2016/17 financial year were R82m, compared to the previous year’s R881m,” the report said. It is this loss which Philiso could have been alluding to when she informed contractors of their non-payment in July. Philiso did, however, say the broadcaster would communicate with service providers before August 15 “to forge a way forward…”
Kganyago, although acknowledging the veracity of the circular and its contents, refused to be drawn into disclosing the extent of the SABC’s self-diagnosed financial afflictions.
“That letter was written to stakeholders; we didn’t issue a statement. We wrote a letter to stakeholders – to people we are in business with. And we expect them to respond to us in the form of a letter. As a matter of courtesy, we cannot engage our stakeholders through the newspapers or a radio station,” was Kganyago’s emphatic response. That is why we didn’t issue a statement to talk to them (the service providers), because we respect our stakeholders… That is something which we are clear about,” Kganyago asserted.
He added that he was not in a position to know when the service providers would comment on the notice of non-payment, saying the response was at the respective contractors’ discretion.
“We are writing to them not as a group; we are writing to individual stakeholders,” Kganyago said. “The fact of the matter is that if I write you a letter and you have issues with the contents thereof, you will respond to me. You are not going to go to a newspaper or a radio station and say ‘I don’t like what they have written in here’.
“Because if we start commenting around this to you, then they must also respond to you. That’s not how we do business,” he added.