Sat Oct 22 23:44:19 SAST 2016

We'll not settle motorsport debt

By Penwell Dlamini | Mar 18, 2010 | COMMENTS [ 0 ]

GAUTENG MEC for economic development Firoz Cachalia has assured taxpayers that debts arising from the liquidation of the Gauteng Motor Sport Company would not be settled from government coffers.

Cachalia told the provincial legislature this week that the assets of liquidated GMSC were R7,3 million and its liabilities R39,3 million.

But he said there was no reason for taxpayers to worry.

"The liquidation process has started and the picture I presented has changed because some of the liabilities have been settled.

"The creditors get paid through the assets of the company. Let's allow the liquidator to do his job," Cachalia said.

"If the liabilities exceed the assets this will not become debt to be paid by the provincial government. The GMSC is a juristic person," he said.

He was responding to DA leader Jack Bloom's statement implying the company was in debt of R32 million.

Bloom accused Cachalia of failing to provide police with an affidavit, which would help with the investigations into former head of department and accounting officer Sibusiso Xaba.

"He is misrepresenting the facts. I am willing to cooperate with any organ of state in the investigation," Cachalia said.

On March 8 Cachalia announced that all motor sport contracts had been terminated and that the company was being liquidated.

He said the closure of the project would save the province R800 million while current contracts would have cost R9 billion in three to five years.

"We were in a recession, keeping GMSC would not meet our job creation priority."


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