Durban — South African political party, the National Freedom Party, is facing liquidation after failing to settle a R25 million loan it owed Ezulweni Investments Pty Ltd since 2014.
The NFP took a R13m loan from the company to fund its 2014 general elections campaign and was hoping to use the councillors’ contributions after 2016 to repay it.
In court papers filed by Ezulweni Investments in the South Gauteng High Court, the company is asking the court to place the party under provisional liquidation in the hands of the Master of Court, until the person affected by the order comes and advances reasons to the court why the order should not be made final.
The company also asks that the costs be borne by the respondent in the case.
The NFP intends to oppose the application.
According to a reliable source in the NFP, the company had gone to court after the party allegedly agreed to pay instalments in 2020, but failed to honour that agreement, which angered the investor.
Party secretary-general Canaan Mdletshe said he was aware of the issue but the party had now reached an agreement to pay the money.
Mdletshe refused to divulge the details of the new agreement, saying it was confidential between the parties.
According to the source, the NFP was holding another round of meetings with its councillors to discuss whether they were going to contribute more than 10% each to the payment.
The source said the NFP had no other income and it would be unreasonable to expect members under the current economic conditions to pay the debt.
Ezulweni Investments CEO Renash Ramdas, who had deposed the affidavit on behalf of the company, had not responded to a request for comment by the time of publication.
The source said it was unlikely that the company would suspend or withdraw the liquidation application since the party failed to honour the initial settlement agreement.
The source said the NFP fell into debt after the 2016 local government elections when the leaders missed the registration date with the Independent Electoral Commission which resulted in the party not contesting in any wards.
The money was said to have accumulated interest and had risen to R25m.
The company which is involved in the printing business was said to have had a good relationship with the late party founder, Zanele kaMagwaza-Msibi, while she was still with the IFP.
The NFP did well in the 2011 local government elections, getting 227 councillors including mayors, deputy mayors and speakers, but problems started in 2014 after its leader accepted an offer from then president Jacob Zuma to be deputy minister of science and technology.
She then suffered a severe stroke and was ill until her death last year.
Daily News