Phosa accused of hiding ANC debts

The former ANC treasurer is accused of lieing about and hiding the ANC's debt when he was in office. (Oupa Nkosi, M&G)

The former ANC treasurer is accused of lieing about and hiding the ANC's debt when he was in office. (Oupa Nkosi, M&G)

Senior ANC leaders have blamed the party’s former treasurer general, Mathews Phosa, for being responsible for the financial mess the party finds itself in.

The Mail & Guardian is in possession of a confidential treasurer’s report that shows the party is struggling to pay millions of rands owed to suppliers. Most of the debts were incurred during and before Phosa’s term of office, which started in December 2007.

An ANC national executive committee (NEC) member said the party’s financial troubles were “the inheritances of a treasurer general who reported to a round of applause to the Mangaung congress that it’s the first time the ANC is in a healthy financial state”. 

While Phosa’s report was generally accepted by ANC leaders, NEC member Lindiwe Zulu stood as a lone voice in raising suspicions about the rosy picture the financial report painted. “The only person who stood up and said ‘I don’t believe this’ is Lindiwe.
She was right,” said the NEC member.

When approached for comment, Zulu confirmed to the M&G that she objected to the report, because her interactions with ordinary ANC members who were not given accommodation or food at the conference showed that their experience was in sharp contrast with what Phosa reported.

Zulu said Phosa was economical with the truth when he presented his financial report to the party’s national conference in Mangaung in 2012. “There is nothing embarrassing like when people arrive at the hotel and are told: ‘There is no accommodation for you’,” said Zulu.  

“The only way the organisation can survive is when we [its leaders] are honest. When people tell you there is money but delegates don’t have accommodation, what am I supposed to think? The ANC is here [in a financial mess] because of him [Phosa]. He said the ANC finances were good but that was not the case.”

‘Paid millions from my own pocket’
Phosa’s report reflected a party in a healthy financial state and said the ANC had generated R1.49-billion since its 2007 Polokwane conference. But Phosa denied he was responsible. “When I became ANC TG [treasurer general], I found a lot of debts running into millions as well as litigations like the many [slain businessperson Brett] Kebble matters,” he said this week. 

“I addressed all these quietly, without blaming my predecessors. I never personalised any debts. I paid millions from my own pocket to settle the movement’s debts with a smile.” Phosa’s Mangaung financial report called on the ANC to “reduce operational costs drastically” in order for the party to “sustain itself”. 

A furious Phosa this week accused Zulu of mixing her personal “gripes” with organisational decisions. “She did not raise any issue after my report was read and adopted in that conference. I challenge you to view the conference video, which will speak for itself.”

The ANC’s latest financial report, which the current treasurer general, Zweli Mkhize, tabled at the party’s NEC meeting last month, revealed that the ANC inherited millions of rands in debt from Phosa’s term. 

Among those still owed money is the University of Limpopo, the venue for the 2007 congress. Out of the suppliers’ lawsuits totalling R30-million, the ANC has managed to pay R22-million in out-of-court settlements. Advertising agency Ogilvy sued the ANC for R30.7-million, but the party has paid R22.1-million and the rest is outstanding. 

There was also an application to liquidate the ANC by events management company the VWV Group, and another application to liquidate the ANC Youth League by the owners of Gallagher Estate. The total amount of these liquidation claims was R54.2-million. The ANC has paid R19.5-million of this amount and, according to Mkhize’s report, an agreement was reached to pay the rest in instalments over 12 months.

Denying financial mess
His report revealed that the party’s liabilities exceed its current assets by R215-million in October. Mkhize accused the M&G of buying information and running a campaign against the party “based on leaks and faceless sources”.  

Mkhize, who demanded to know the newspaper’s sources, said a proper handover was done from Phosa after the Mangaung congress and that he (Mkhize) was responsible for ANC finances “including what happened during the previous term”.

“We reaffirmed that the ANC is not in a financial mess or broke,” he said. “All other matters relating to ANC finances and questions you may have are dealt with internally in the organisation,” said Mkhize.

Matuma Letsoalo

Matuma Letsoalo

Matuma Letsoalo is the political editor of the Mail & Guardian. He joined the newspaper in 2003 and has won numerous awards since then, including the regional award for Vodacom Journalist of the Year in the economics and finance category in 2015, SA Journalist of the Year in 2011, the Mondi Shanduka SA Story of the Year award in 2008 and CNN African Journalist of the Year – MKO Abiola Print Journalism in 2004.
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