SABC loses costly case to auditors

The SABC has been slapped with another cost order after losing a court application to review and set aside a contract it had awarded to an audit company to identify irregular, wasteful and fruitless expenditures.

The South Gauteng High Court in Johannesburg dismissed the SABC's application and ruled in favour of Sekela Xabiso Incorporated, settling a two-year-long legal dispute between the two companies .

The legal battle between the two entities, according to court papers, started in 2017 when the public broadcaster suspended the audit company's contract, arguing that proper procurement processes were not followed.

The papers show that the SABC had also accused the audit company of failing to complete work on two of the three agreements it had signed with them between 2015 and 2017.

The SABC said the company was submitting invoices, some amounting to R6.5m, for work done while it had failed to complete the work. The discovery, they said, prompted the interim board to order an investigation by the Special Investigating Unit (SIU) on the contract to determine its legality.

The SABC also argued that the company was appointed through a deviation process without the existence of any exceptional, urgent or emergency reasons being provided by it.

The papers further shows that Sekela Xabiso, in its answering affidavit, conceded that during the two agreements it had signed with the SABC, it was unable to complete some of the work, but it put the blame squarely on the the SABC, arguing that it was due to the public broadcaster's poor document management.

The company said it was during the second agreement, which is questioned by the SABC, that they compiled a report which identified R5bn worth of irregular, fruitless and wasteful expenditure including transactions to the value of R176m that could not be traced to any supporting documentation.

Sekele Xabiso disputed the SABC's assertions that they were appointed irregularly and said that the third agreement which was being contested by the SABC came as a result of the SABC asking them for a proposal to complete the work which could not be done in the second agreement.

They said their agreement with the SABC was treated as a continuation of the second contract which could not be completed because of the failure by the SABC to provide the company with the documents to complete its work.

In her judgement, acting judge Hilary Rabkin-Naicker dismissed the SABC's application with costs and said Sekela Xabiso's appointment by the SABC met the requirements of the public broadcaster's procurement prescripts.

SABC spokesperson Vuyo Mthembu said: "The SABC welcomes the judgment of the South Gauteng High Court, which has just been made available to it by its attorneys of record.

"The SABC will consider the judgment, [and] consult with the SIU prior to deciding on its next cause of action.

This is one of the matters that was raised by parliament back in 2016 and investigated by the SIU in terms of a proclamation issued by the president.

"The SIU, having investigated and reported on the matter during December 2017, proceedings were instituted by both the SABC and the SIU against Sekela Xabiso to have the contract with the SABC declared unlawful and invalid, on the basis of Sekela Xabiso services having been acquired contrary to SABC procurement policies."

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