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About 4500 people have become the latest casualties of South Africa’s state capture tale after their controversial employer was forced to go into liquidation.
African Global – the company formerly known as Bosasa, and which has been at the centre of state capture allegations over the past few weeks – announced its voluntary liquidation this morning.
In a statement released today, the board of directors confirmed that it had received a formal notification of its bank’s decision to distance itself from the group and close all the entity’s bank accounts. African Global was unable to open a trading account with another bank – locally and internationally.
“The extensive reputational damage in the past few months, occasioned by negative media reports, has resulted in financial institutions determination that the African Global Group poses a reputational risk for them as clients,” the statement said.
“Tragically, the group will be unable to trade without a bank account” and it was advised to enter into business rescue or voluntary liquidation.
Following testimony at the Zondo commission into state capture, numerous bigwigs from Bosasa were arrested and appeared in the Pretoria Specialised Commercial Crimes Unit on February 1.
These include former Bosasa chief operating officer Angelo Agrizzi, whose explosive testimony implicated numerous state officials, and involved millions of rands in bribes.
Agrizzi, along with former Bosasa chief financial officer Andries van Tonder and former correctional services chief financial officer Patrick Gillingham face charges of corruption, money laundering and fraud. The case was postponed to February 27.
Read: Bosasa accused in court as case against Watson builds
African Global isn’t the first company to shut down after banks closed their accounts citing reputational risk.
The Gupta family also found themselves in the same position after allegations emerged of their relationship with former president Jacob Zuma.
Their banks cut ties with the Guptas, citing suspicious transactions and regulatory risks.
The Financial Intelligence Centre red-flagged at least 72 transactions worth R6.8 billion which served “no apparent business or lawful purpose”.
Representatives from Standard Bank, Absa and Nedbank appeared before the state capture commission to testify about the transactions.
A number of Gupta-owned mining companies are either in business rescue or facing closure because the bank accounts of Oakbay, the holding company for the Gupta family’s businesses in South Africa were also closed down.
Their media company comprising The New Age daily and the TV Network ANN7 was controversially sold to former ANC spindoctor Mzwanele Manyi and was rebranded as Afro Worldview.
About 350 workers were left jobless when Afro Worldview shut its doors in August last year.
