The African National Congress (ANC) faces potential liquidation over a R102 million debt to Ezulweni Investments, raising concerns about its eligibility to participate in the 2024 general elections.
Here’s what could happen if the ANC is forced into liquidation
The ANC’s dispute with Ezulweni Investments has escalated, with the company giving the party until Wednesday to settle an R102 million debt or face liquidation proceedings.
The situation intensified after the Gauteng High Court’s Sheriff visited the ANC’s Luthuli House headquarters, but the ANC remains adamant about not paying, pending an appeal to the Constitutional Court.
Should the ANC fail to meet Ezulweni’s demands, it risks liquidation, which could disqualify the party from contesting in elections. Ezulweni’s attorney, Shafique Sarlie, emphasised the urgency of the situation, noting the risks the ANC faces regarding its electoral participation if liquidation proceeds.
Despite the looming threat, the ANC’s legal manager, Billy Malatji, stated that the party would not comply with the payment demand. Malatji insists that the contract with Ezulweni was fraudulent and that the ANC’s appeal effectively suspends the court order until a final decision is reached.
Can the IEC block the ANC from the 2024 general elections?
In South Africa, the participation of political parties in general elections is governed by the Electoral Commission of South Africa (IEC) and relevant laws.
However, the situation of a political party under liquidation is complex, involving both electoral and corporate law considerations.
Liquidation, in a corporate sense, refers to the process of winding up a company’s affairs, which includes settling debts and distributing remaining assets to shareholders. When a political party is under liquidation, it is essentially considered to be in the process of being dissolved, with its assets being liquidated to pay off its debts.
From a legal standpoint, a political party under liquidation may face significant barriers to participating in general elections. The process of liquidation implies that the party is facing serious financial troubles, which could impede its ability to meet the requirements set by the IEC for election participation, such as paying deposits, submitting candidate lists, and conducting campaigns.
Moreover, the IEC requires parties to be in good legal standing to participate in elections. A party under liquidation, struggling with financial solvency and possibly legal proceedings, might not meet these criteria.
While there may not be a specific law explicitly prohibiting a party under liquidation from participating in elections, the practical implications of liquidation and the requirements for electoral participation make it challenging, if not implausible, for such a party to engage effectively in the electoral process.