Parliament looking at buying Travelgate debts

The decision to buy up the debtor’s book of one of the travel agencies involved in the so-called Travelgate scandal, Bathong Travel, will save Parliament money, officials said on Friday.

Parliament’s presiding officers, National Assembly Speaker Gwen Mahlangu-Nkabinde and National Council of Provinces chairperson Mninwa Mahlangu—acting on behalf of Parliament and on a decision of the multi-party Parliamentary Oversight Authority—had bought the claims from the liquidators, Parliament said in a statement.

“The purpose of purchasing the claims is to ensure that Parliament recovers losses incurred, does not suffer undue financial losses and to enable Parliament to manage the claims internally.

“The purchase has resulted in an estimated saving of R350 000,” it said.

Parliament had also agreed to establish a multi-party committee to examine claims arising from the liquidation and to advise on how to handle each one.

The decision had been endorsed by political party leaders after a meeting on Thursday.

The liquidators did not have enough money to continue prosecuting the various defendants who had been sued and had confirmed that no creditors were prepared to provide any funding.

“Accordingly, the liquidators faced significant potential liability for costs to the various defendants who have been sued.”

It was estimated the liquidators’ potential liability in respect of adverse cost orders was about R900 000.

Parliament, which comprised 80% of the proved claims, would have been called upon to pay 80% of the contribution.

Thus there was a real likelihood of Parliament being levied with a contribution of R720 000 (being 80% of the estimated costs of R900 000).

“By settling on a purchase price of R370 000 Parliament has saved R350 000 of the likely full amount with which it may have been levied.”

The liquidators had advised creditors that, should creditors not provide funding for the ongoing litigation, the liquidators would attempt to sell the actions to a willing buyer.

It was, therefore, in Parliament’s interest to purchase the claims.

In doing so, Parliament would have an opportunity to negotiate and settle with the MPs involved where it was clear that a valid defence existed, the statement said.

It was reported last weekend that the purchase had effectively brought relief to more than 60 MPs who were set to be sued by the liquidators after they ignored demands for payment.—Sapa

.
.

Client Media Releases

ITWeb, VMware second CISO survey under way
Doctoral study on leveraging the green economy
NWU's LLB degree receives full accreditation
Trusts must register as home builders