Technical executive of the South African Institute of Professional Accountants, Faith Ngwenya, says the liquidation of African Global Operations previously known as Bosasa is going to add to the high unemployment rate in the country. The company has almost 5 000 employees.
On Monday the company announced that it will apply for voluntary liquidation after it was given a formal notification from its banks that it will cut ties with the embattled company.
In a statement, the company’s Board of Directors said the banks had indicated that they wanted to distance themselves from the company due to serious corruption allegations that have emerged from the Commission of Inquiry into State Capture.
The bank has given African Global Operations until the end of February to find another banking partner.
African Global Operations says the extensive reputational damage from the negative media reports in the past few months have led to financial institutions cutting ties with the company.
The company has been in the spotlight following testimony at the State Capture Inquiry by members of the group implicating it in serious impropriety.
Ngwenya says: “The African Global Group has got a few subsidiaries and we have not yet heard from the subsidiaries, how they’re going to be affected, because they are also tainted. Everything that has come out paints everyone that’s linked to Bosasa. So what is going to be happen to these employees, can they be placed at any of these subsidiaries, will the subsidiaries continue to exist or are they also going to be round up? So those are all issues that needs to be decided upon.”