Mashatile drawn into court battle over ANC’s R36.4m election debt - TimesLIVE

Digital services company Eltel says it faces virtual collapse and possible liquidation over an alleged R36.4m debt owed by the ANC, with deputy president Paul Mashatile cited in an urgent high court application seeking to force the party to pay for work linked to its 2019 election campaign.

In papers filed in the Johannesburg high court on Monday, Eltel director Asif Casoojee warned that the company cannot wait for the next funding cycle to recover the money, arguing that the delay threatened its continued operations.

Eltel is seeking an order compelling the ANC to pay R36.4m, comprising the outstanding principal debt and accumulated contractual interest as at the end of September.

The company is also asking the court to direct the Electoral Commission of South Africa (IEC) to withhold upcoming public funding allocations due to the ANC, up to the value of the claim, and to pay those funds into the trust account of Eltel’s attorneys.

Eltel argued that the money allocated to the ANC provided a potential source from which the outstanding debt could be recovered.

“The applicant cannot afford to wait until the end of the next funding quarter next year to seek redress,” Casoojee said in his founding affidavit.

Mashatile, cited in his former capacity as the ANC’s treasurer-general, is being asked to take administrative, financial and executive steps within his authority to ensure that the party complied with the payment demands.

The application traces the dispute to digital media, technology and campaign services that Eltel says it provided to the ANC during the 2019 national and provincial elections.

Eltel is an independently owned business. It does not have institutional resources or external investors capable of indefinitely carrying a debt of this magnitude.

Casoojee says the company committed financial resources, infrastructure and expertise to deliver the campaign, believing the party would honour its contractual obligations.

He says the company continued accommodating the ANC despite delays in payment and the growing commercial burden associated with the outstanding debt.

“(Eltel) is an independently owned business. It does not have institutional resources or external investors capable of indefinitely carrying a debt of this magnitude,” Casoojee stated.

He argued that Eltel’s decision to continue supporting the campaign was based on the expectation that the ANC would eventually settle its obligations.

The affidavit set out a series of acknowledgements and repayment undertakings which Eltel relied on to support its claim that the ANC recognised the debt over several years.

On May 30 2019, the company says, the ANC’s then CFO Bongani Mahlalela sent a formal communication attaching a signed letter acknowledging the outstanding debt and indicating when payment could be expected.

A further confirmation followed on July 23 2019, when Mahlalela allegedly wrote to Eltel confirming that the ANC owed R21.5m for services rendered during the 2019 elections.

In February 2020, the ANC allegedly issued an updated acknowledgement confirming that the principal debt had increased to R21.7m.

The papers said the party was working to raise funds to settle the amount.

A further payment protocol was allegedly signed on June 22 2020, committing the ANC to paying R8m by June 30, followed by R12m by July 31. Eltel alleges that the protocol was ignored and breached.

In September 2020, after an alleged payment of R5m, the ANC acknowledged a remaining balance of R15,478,244, including interest, and undertook to settle it by the end of that month.

The outstanding amount nevertheless remained unpaid, the company said.

The dispute continued into 2022, when Mashatile, then the ANC’s treasurer-general, allegedly acknowledged the debt and made another undertaking to pay.

In a letter dated August 15 2022, Mashatile allegedly confirmed that the ANC owed Eltel R23,665,280 and committed the party to paying R2m by the end of that month while negotiations continued over the balance.

The affidavit said the debt had also been formalised through a promissory note signed by Mashatile on March 16 2022 in his official capacity on behalf of the ANC.

According to Casoojee, the document contained an unconditional written promise to pay the outstanding amount and set out the repayment obligations.

Eltel said the ANC made an initial payment of R1m but failed to settle the remaining principal balance of R23,275,735.

The company argues that the failure to honour the promissory note made the outstanding balance immediately enforceable.

By September 30 2026, Eltel calculated the total amount due, including accumulated contractual interest, at R36,457,40.

It is also seeking further interest at 10.5% a year on the outstanding principal, as well as R2.9m in legal costs.

The company is also seeking an order directing the ANC and Mashatile to provide details of active banking accounts, investment facilities and provincial structures designated to receive public funding allocations.

The Sunday Times has established that the matter is set down for an urgent hearing in the Johannesburg high court on October 27.

The Sunday Times previously reported that Eltel obtained a default judgment against the ANC last month in connection with the debt.

The latest application seeks further relief, including orders targeting the party’s public funding allocations and specified assets, to secure payment.