SABC television studios in Auckland Park. Picture: KEVIN SUTHERLAND
SABC television studios in Auckland Park. Picture: KEVIN SUTHERLAND

The SABC, which remains in a dire financial situation, has suspended its retrenchment process amid pressure from
the government, labour and other stakeholders.

The public broadcaster had hoped to conclude the process by the end of January. It has been unable to pay all its creditors
and warned in November that it would be unable to pay salaries by February, unless a R3bn guarantee was secured from the government.

SABC spokesperson Neo Momodu confirmed at the weekend that the retrenchment process was suspended.

The planned job cuts were likely to affect about 1,000 permanent employees and 1,200 freelancers.

"The SABC communicated to staff and organised labour at the end of 2018 that the envisaged [section] 189 process [retrenchments] was held in abeyance and this is still the case to date," Momodu said.

"The SABC’s dire financial situation is a matter of public record. Monies owed to creditors are steadily climbing, however, the SABC has worked out a payment plan in consultation with the relevant creditors for the outstanding payments.

"The SABC management continues to discuss its financial sustainability and related issues with the relevant stakeholders, and is working to find a solution for the benefit of the SABC, its employees and the SA public," Momodu said.

The SABC sunk into a deeper crisis late in 2018 following the resignation of four directors, which left the broadcaster’s board without the quorum required to make decisions.

Their resignations came in the wake of a scathing letter by communications minister Stella Ndabeni-Abrahams to the board in which she accused the non-executive directors of not acting in the best interest of the public broadcaster as they pressed on with retrenchments.

The loss-making SABC says no lender is prepared to do business with it amid the severe cash crunch. Executives told MPs previously that this was due to its disclaimer audit opinion and the fact that the auditor-general had raised doubts about its going-concern status. The SABC also said that retrenchments were unavoidable, despite objections by the government, labour and some MPs.

In 2018, executives said the SABC had uncovered a number of irregular promotions and salary increases by the previous management, which resulted in the inflation of the salary bill. The broadcaster was overstaffed and the wage bill was inflated when freelancers were hired to do jobs that could be done by permanent employees.

In September 2018, the SABC, which recorded a loss of R622m in the financial year to end-March, was granted borrowing powers and a borrowing limit of up to R1.2bn by the Treasury, in line with the Public Finance Management Act.

The SABC spends more than R3bn a year on the salaries of 3,000 permanent employees. It expects a net loss of R805m in the 2018/19 financial year, should cost-cutting measures not be implemented.

phakathib@businesslive.co.za

Correction: January 21 2019

The headline was changed to remove the SABC board as making the decision to cut jobs. The board does not at present have the required quorum to make decisions.