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03 Oct 2008 07:51
An offer to buy back voucher claims at the centre of the Travelgate scandal was considered the best option for dealing with the matter, Parliament said in a statement on Thursday.
The decision, advised by senior legal counsel, was agreed to by the Parliamentary oversight authority committee, which included the Democratic Alliance and other opposition parties, it said.
It dismissed as “devoid of all fact” insinuations that Parliament decided to “sneak” the decision through while the country was busy with the swearing in of a new president.
It said the committee’s meeting had been scheduled to take place well before anyone could have anticipated recent political developments.
It said the offer to buy back the travel-voucher claims from Bathong Travel liquidators had followed a thorough and due consideration of all factors, including a cost-benefit analysis.
The committee decided to withdraw the mandate of the liquidators of Bathong Travel to recover debt owed to Parliament.
This decision was based on information that only R50 000 remained in the Bathong liquidation account, and that the legal costs of pursing any claims, including Parliament’s, would far exceed this amount.
If the liquidators accepted Parliament’s offer, all viable legal claims would still be pursued by Parliament, including the institution of criminal proceedings, where necessary.
All other creditors had refused to provide the liquidators with money to pay the legal costs of pursuing their claims.
Should the liquidators drop the matter because of a lack of funds, they would be liable for the legal costs of all the creditors they had brought claims against. The only option left to the liquidators was to sell the claims.
Parliament was faced with the most serious risk, which would increase if—with the liquidators unable to fund the security for costs—defendants asked the courts to dismiss the claims with an adverse costs order.
DA chief whip Ian Davidson on Tuesday lambasted a decision in principle by Parliament’s oversight authority to abandon the debt owed the legislature by MPs allegedly involved in the scandal.
ID leader Patricia de Lille on Wednesday urged Auditor General Terrence Nombembe to investigate the legality of Parliament’s decision to abandon MP’s debt.
“It sends out the wrong message entirely that MPs who have for years stubbornly refused to cooperate with liquidators, or pay back the funds, have now been let off the hook,” De Lille said.
Earlier this year, under pressure from MPs, Parliament tried to withdraw its mandate to the liquidators of Bathong Travel to recover outstanding monies from MPs implicated in the travel voucher fraud.
This move was met with opposition from Bathong’s other creditors, and was subsequently abandoned.
Parliament then requested a report from legal advisers which indicated that some of the claims had been proscribed.
Some others were procedurally faulty in that the legislature had not been joined as party to the claim, and finally, it was not economically viable to recover others because the legal cost of recovery would exceed the actual amount claimed.
As a result, Parliament decided to withdraw its mandate to the liquidators to recover the debt, and to prevent other entities from purchasing that claim and proceeding against MPs, Parliament decided to buy back the claim, which exceeded R3 200 000, at reduced cost of R200 000.
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