Niki Barker
The already cash-strapped KwaZulu-Natal Nature Conservation Service faces further financial stress, with the disclosure this week that a considerable sum of money deposited with the embattled New Republic Bank (NRB) in Durban has been frozen as a result of NRB being placed under receivership.
It is claimed that the conservation service deposited R48- million with NRB.
This money had been borrowed by the conservation body at low interest from an offshore account and re-invested in NRB at higher interest rates, a source within the service who requested anonymity said this week.
The bank’s curator, Pieter Strydom, confirmed that the KwaZulu-Natal Nature Conservation Service had deposits with the bank, but would not confirm the amount involved.
“All funds are frozen until further notice,” he said. “There is money that has been deposited by the KwaZulu-Natal Nature Conservation Service, but I cannot disclose the amount.”
The Reserve Bank has applied for the liquidation of NRB after the curator found its liabilities exceeded its assets by R28- million. The Durban High Court last month rejected the Reserve Bank’s application for liquidation of NRB, but this week granted it leave to appeal the decision.
Anita Wong, a conservation service representative, said this week not all of the money invested in NRB was borrowed funding. She was unable to disclose how much of it was borrowed.
A loss of R48-million would be a severe blow to an organisation already burdened with budget cuts and operations running at a loss. However, Wong said the conservation body is confident not all the money will be lost. “It’s impossible to lose all that money, as the bank is not insolvent. We have enough cash reserves to pay back any loans.”
She added that it would take about three years to recoup the money deposited in the NRB, but that the frozen account would have absolutely no impact on the day-to-day operations of the organisation.
Funds to pay salaries and other operational costs are held in a different bank account, she said, and the money in the NRB is investment funding. “It is part of our policy to invest money at high interest, where we can maximise a return on an investment.”
Wong insisted the funds that have been frozen are not public monies, but savings effected by the conservation service and accumulated capital. She claimed the money was gaining interest while it was frozen.
Strydom denied this: “A frozen account does not pay interest. I have received one offer for the bank, where the interested buyer offered to pay back all the money from depositors, at no interest after five years, but I could not accept that offer.”
The KwaZulu-Natal Nature Conservation Service holds funds for various trusts, including the Isivuno Trust and a community levy trust.
The community levy is a fee it charges tourists over and above entrance fees and accommodation tariffs, which is placed in a trust fund for use in development funding in communities. The Isivuno Trust holds money donated by private donors for the same purpose.
The separation of the two trusts is a result of the amalgamation last year of two bodies to form the present KwaZulu-Natal Nature Conservation Service.
The Isivuno Trust was a creation of the former KwaZulu-Natal Bureau of Natural Resources, while the community levy was a Natal Parks Board initiative. Wong says the new board is looking at ways to combine the two trusts.
The new organisation is currently busy with extensive internal changes, in an attempt to bring it in line with new policies governing the running of parastatal organisations. Already questions are being asked about its fitness to run development projects.
A loss of a substantial sum of investment capital could further jeopardise the organisation’s credibility regarding tourism development.
ENDS