SANRAL misleads SCOPA on their true financial situation
On 29th November, during a heated debate, Mr David Ross, a SCOPA committee supporter, directed a question at SANRAL on whether they are misrepresenting their true financial situation and possible insolvency, by reflecting their outstanding debt of over R7bn (which now stands closer to R9bn) as an asset under outstanding receivables, instead of as a liability or write-off cost due to the highly probably uncollectable nature of this debt.
SANRAL responded that the law (PFMA) does not simply allow them to write off such debt and will continue to endeavor to collect this debt going forward. "This however, was not an answer to the question asked by Mr Ross," says Ben Theron, Portfolio Director on Transport at OUTA.
Earlier in the session, which was convened to question and seek clarity from SANRAL on the extent of their irregular expenditure, Ms Mulder had said they were within the International Finance Resorting Standards (IFRS) to reflect the substantial re-valuation of their road assets in 2010.
The Organisation Undoing Tax Abuse (OUTA) maintains that it is disingenuous for SANRAL to announce IFRS as their financial reporting guide on the asset valuation on the one hand, and then to disregard those same standards when it comes to reflecting their irrecoverable debt from the outstanding e-toll situation on the other hand.
When questioned by Mr Brauteseth on what SANRAL believes the likelihood is of collecting this debt, their management failed to answer and instead, SANRAL's Chairperson, Mr Roshan Morar, indicated that e-toll income levels have achieved a slight rise in recent months.
"This response of a slight increase in e-toll revenue was a complete fob-off to the question of SANRAL's likelihood to collect the debt. In fact, the slight rise in e-toll income is completely misleading, as their monthly e-toll debt increases by over R200 million per month," says OUTA’s Theron
OUTA maintains that the likelihood of collecting even as much as a quarter of the outstanding e-Toll debt is highly unlikely. SANRAL executives should know this, especially after their failed Less60 discount dispensation and the fact that there was no increase in e-toll debt collection following their issuing of 6000 summonses earlier this year.
This effectively means that according to IFRS and SANRAL's own internal policy on debt management, their accounts do not reflect the reality of their financial situation.
This we believe is tantamount to gross misrepresentation by the SANRAL Board and their fiduciary duties and responsibilities are now brought into question. This is a serious matter that the Board supporters of SANRAL cannot ignore and one they could be held personally accountable and liable for, if indeed an enquiry arises as to their fitness to hold office."
Before pursuing an application to declare supporters of the board as delinquent directors, OUTA will be lodging complaints with the Auditor General and other financial regulatory bodies, in the hope that SANRAL's financial statements will be amended to reflect their reality and that corrective action will be taken accordingly.