The SA Post Office (Sapo) requires an additional R3.8bn to implement its business rescue plan as it faces severe financial and operational challenges.
This was revealed during a meeting of the standing committee on public accounts (Scopa), where the auditor-general SA (AGSA), the department of communications and digital technologies and Sapo’s business rescue practitioners (BRPs) briefed parliament on the 2023/24 audit outcomes.
Sapo received a fifth consecutive disclaimer audit opinion, with the AGSA citing poor record-keeping, unreliable financial reporting, and unresolved irregular and fruitless expenditure. The AGSA confirmed its presence at the meeting and reiterated its concern over Sapo’s internal controls and governance failures.
The BRPs — Anoosh Rooplal and Juanito Damons — reported that Sapo’s debt had been reduced from R8.7bn to R1.8bn through a creditor compromise process. Creditors accepted 12c on the rand, while statutory and payroll creditors were offered 18c, contingent on the receipt of R3.8bn in additional funding. To date, only R2.4bn has been received.
Sapo’s normalised operating loss for the year was R1.8bn, with revenue of R2.6bn and expenditure of R4.8bn. Fruitless and wasteful expenditure totalled R495m and irregular expenditure stood at R53m. The BRPs confirmed that 4,342 employees had been retrenched and the branch network reduced from more than 1,000 to 657. No further retrenchments are planned.
The turnaround strategy includes expanding digital services, leveraging Sapo’s national footprint for government service delivery and modernising IT infrastructure. However, implementation has stalled due to the funding shortfall. The BRPs warned that without the remaining R3.8bn, key elements of the plan, including infrastructure upgrades and the second tranche of creditor payments, could not proceed.
Scopa chair Songezo Zibi emphasised the need for continuity and accountability. “What you also don’t want is the business rescue practitioners exiting, handing over to an acting team, who then hand over to a permanent team that is staggered over time. That is an absolute disaster,” he said.
Zibi confirmed that Scopa would schedule a follow-up session to assess the turnaround plan, the unbundling of Postbank and the future governance model. “We need to inform ourselves properly of the prior and post periods in terms of the unbundling of the Postbank from the Post Office,” he said.
The BRPs also confirmed that Sapo’s 2024/25 annual financial statements were submitted on time and were under audit. They noted that while business rescue legislation did not require audited statements, they opted for full audits to ensure transparency and accountability.
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