National Freedom Party set to be liquidated

THE National Freedom Party (NFP) could soon disappear from the South African political space after its main creditor, Ezulweni Investments, has decided to go ahead with a liquidation court application after the party’s failure to settle a R25 million loan taken in 2014.

In the final letter of demand penned by the company’s law firm, Sarlie & Associates, which was seen by the Daily News, last week the company was concerned about the party’s failure to honour its commitments to pay the money.

The letter partly reads: “We record that despite our client having afforded the NFP more than sufficient time and opportunity to resolve its internal leadership dispute, and in so doing, inter alia, facilitate the payment of monies held for the party by the IEC, the opposed factions clearly are incapable and/or unwilling to do so.

“In the circumstances, our firm instructions are to proceed forthwith with the liquidation application, without further notification or delay. You will be furnished in due course with the appropriate court order and details of the liquidator entrusted by the Master of the High Court, with the winding up of the party.”

The letter was soon followed by another to the individual councillors of the party who had personally committed themselves to pay the debt at the meeting with the creditor in March last year.

It reads: “As you may know, we act on behalf of our aforementioned client. Our instructions are that on or about March 4, 2022, and at Durban, you executed and concluded an Acknowledgement and Undertaking, in terms whereof you, inter alia, confirmed the indebtedness of the NFP to our client in the total sum of R25 665 514 (twenty-five million six hundred sixty-five thousand, five hundred and fourteen rand) and moreover, undertook and agreed, jointly and severally, the one paying the other to be absolved, with your co-signatories to the said Acknowledgement and Undertaking.”

“The Acknowledgement further records that should any one payment not be made timeously and in full, the full amount therein then outstanding would immediately become due and payable. In the circumstances, our instructions are to demand immediate payment of settlement of the entire debt within 3 (three) days, failing which our instructions on behalf of our client are to proceed with an immediate application to the Durban High Court for judgment to be granted against you in the said amount, together with costs.”

Ezulweni CEO Renash Ramdas confirmed to the Daily News that he has taken serious steps to proceed with liquidation and people who had signed personal surety have been sent letters of demand.

The law firm’s attorney, Shafique Sarlie, also told the paper: “I can confirm that the NFP has not made any recent payment on the considerate debt owed to my client so the firm instructions from our client are that we proceed with the liquidation and we are in the process of enrolling the matter for hearing shortly.”

Furthermore, he said the party had agreed to pay R100,000 a month for April and May last year and then start paying R500,000 from June of the same year until the full payment was received, but it failed to do so.

The party’s finances were further compounded by the Electoral Commission of South Africa’s decision to withhold party funds due to the infighting. It was after the Pietermaritzburg High Court ruling which declared the 2019 conference, which elected the current leadership, invalid.

The NFP took a R13m loan from the company to fund its 2014 general elections campaign and was hoping to use the councillors’ contributions after 2016 to repay it. When the party failed to contest the elections, its finances worsened and it failed to pay back the money.

The company, which is involved in the printing business, was said to have had a good relationship with the late party founder, Zanele kaMagwaza-Msibi, while she was still with the IFP.

NFP secretary-general Canaan Mdletshe said the party would not comment on something that they had no knowledge of, as this communique was sent to one NFP councillor.

“The question is, why would Ezulwini lawyers reach an agreement with an individual when they want to deal with matters affecting the organisation?” asked Mdletshe.

The NFP did well in the 2011 local government elections, getting 227 councillors including mayors, deputy mayors and speakers. It made a strong comeback in the 2021 local government elections forcing coalitions again in the hung municipal elections.

As the liquidation seems inevitable, the future looks bleak for the current two MPs, one MPL and scores of councillors in the various municipalities.

Daily News