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Govt incompetence 'sank' Sanyati

Johannesburg - Construction company Sanyati Holdings [JSE:SAN] has to be liquidated due to corruption and incompetence in provincial and municipal government, Business Day reported on Wednesday.

Malcolm Lobban, who resigned as Sanyati CEO last month, told the paper that corruption and incompetence had forced the listed company out of business rescue proceedings.

The company had not been paid by government departments in the Free State, KwaZulu-Natal, and Limpopo.

The Free State roads department had accused contractors of shoddy work and corruption, and had refused to pay.

"Allegations that our work was shoddy are completely unfounded. It is corruption and incompetence, and if I had to choose one over the other, I would say corruption," Lobban told Business Day.

Sanyati Holdings employs about 2 500 permanent and temporary staff and would soon be liquidated.

Late last year the Treasury placed the Free State roads department, most departments in Limpopo and some in Eastern Cape under national administration.

Lobban said this had not helped as it had led to payments to service providers being suspended.

According to Business Report Sanyati had been excluded from a settlement agreement between the Free State provincial government for outstanding claims by other contractors - Wilson Bayly Holmes - Ovcon [JSE:WBO], Raubex [JSE:RBX], and Basil Read Holdings [JSE:BSR].

Lobban said Sanyati had an 18-month outstanding claim of R43m against the Free State roads department, after having received R14m in part payment late last year.

Free State roads department spokesperson Zolile Walaza said there was a difference between the amount Sanyati claimed was completed and the amount contained in a report by technical experts.

He told Business Day the department would meet Sanyati on Thursday to "try and convince (them) to accept the settlement".

 
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