This is according to Maluleke’s latest report on the audit outcomes of both national and provincial government departments, as well as their respective entities. Overall the AG has also reported the South African Post Office (Sapo) and the Department of Defence, in addition to the FDC, to the Directorate for Priority Crime Investigation, known as the Hawks.

The FDC has for the second consecutive year received a disclaimed audit opinion, which is deemed the worst opinion an auditee can get, because it means they couldn’t avail evidence for most of the amounts and disclosures in their financial statements. The AG has, in the light of their findings on the entity, recommended that the management of the FDC look into resolving the material irregularity that could not be probed or dealt with by the Hawks.

FDC is in a liquidity crisis

Maluleke and company have also highlighted some of the revenue challenges that are negatively impacting the FDC presently. For one, the entity earns revenue by leasing out the commercial and residential properties it owns in the province, and also by charging interest on the loans it offers to small, medium and micro enterprises. The entity allegedly doesn’t receive many financial grants from the Department of Economic, Small Business Development, Tourism and Environmental Affairs (Destea), because it is meant to be self-sustaining, but it isn’t. In order to improve its cash flow, the FDC needs to recover its long-outstanding debt from tenants and loan recipients - 96% of which has been deemed irrecoverable.

FDC owes Centlec nearly R300 million

In July, the FDC was plunged into darkness after Mangaung Metro’s power utility, Centlec, cut power supply owing to the entity’s near R300 million debt.

In 2019, the FDC landed in hot water over its dealings with the now-defunct VBS Mutual Bank. The FDC’s Bloemfontein offices were then raided by the Hawks. The Hawks said at the time that they managed to seize documents and computers pertinent to their investigation and arrests were imminent. To date it appears no arrests have been made in relation with the VBS deal.

The FDC came under the spotlight in 2018 following the release of Jerry Motau’s ‘Great Bank Heist’ report on the liquidated VBS. Motau alleged the FDC, along with 52 other entities and individuals, received “gratuitous payments” from the bank. The FDC vehemently denied that the more than R104 million was “gratuitous”, stressing that it was an investment instead.

The chairperson of the entity’s board, Hantsi Matseke, said at the time that the entity had loaned the bank R100 million in June 2017. The bank repaid its loan in four tranches, the last of which was R54 million.

Having had insisted there was ample evidence of the transaction in their financials, it was reported there was in actual fact very little trace of the exchange, apart from an entry which indicated the entity was seeking about R9,5 million from the bank which was not accessible due to the Limpopo-based bank being placed under curatorship.

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