Ex-CEO demands probe into vanished billions at Post Office

Key topics:.Ex-CEO says over R7bn vanished from Post Office financesSAPO needs R6.8bn more despite past bailouts and monopoly rightsGovt plans to review Post Office’s exclusive 1kg parcel monopoly.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Myles Illidge.Former Post Office CEO Mark Barnes says the state-owned company should prioritise investigating the inexplicable disappearance of billions of rands from the Post Office’s finances.Speaking to Cape Talk about the South African Post Office’s (Sapo’s) turnaround plan, Barnes said the agency should first determine whether the losses are due to systemic problems or corruption.“The Post Office, when I had it, had about a R5.2 billion net asset value. Since then, what was reported in the last month or so had gone to R1 billion, and they had written off R7.4 billion of debt,” he said.He noted that the R7.4 billion debt didn’t exist when he was at the Post Office.“There are any number of billions unexplained. Get that understood first because if that’s some sort of structural system thing wrong or if it’s just corruption,” said Barnes.“We need to know that before we start.”He also noted that the Post Office had received a R2.4 billion injection and is projected to require further injections of R3.8 billion and then R3 billion.Referring to the turnaround plan and the intention for Post Office to move more into the e-commerce space, Barnes said this was something recommended several years ago but ignored.“There’s a lot of promise. There’s a lot of aspiration. But, to be blunt, going into e-commerce and digitisation is exactly what we had in mind and had presented some years ago,” he said.He also warned of already-established players in the space presenting a significant challenge.“The world has moved on in the five or six years since I left there. The question is: can you get it done now, some years later, when we’ve got some really savvy established players in that space?” said Barnes.Barnes served as CEO of the Post Office from 2014 to mid-2018, serving just four months in the 2018/19 financial year.While the Post Office wasn’t profitable during the former CEO’s final two full years at the company, with it reporting losses of R1.2 billion on both occasions, its losses increased significantly in 2019.Online shopping rent-seeking.The Post Office currently holds a monopoly on certain postal services, including the delivery of parcels weighing less than 1kg — a category into which many online shopping products fall.Under the Postal Service Act of 1998, Sapo was granted a 25-year exclusivity period, which has been extended several times since.In early 2025, Sibongiseni Vilakazi, a member of the Portfolio Committee for Communications and Digital Technologies, paid an oversight visit to Sapo’s headquarters in KwaZulu-Natal.“There was an animated discussion on income generation, with many in attendance believing that it is possible for Sapo to generate sufficient income to sustain itself,” Vilakazi wrote in his report.“Securing the legislated advantages would help improve income.”Vilakazi said Sapo’s management team in KwaZulu-Natal believes protecting the Post Office’s legislated monopoly on packages less than 1kg is critical.However, communications minister Solly Malatsi announced his intentions in March 2025 to review the Post Office’s monopoly on these postal services.In a notice published in the Government Gazette, the minister said he would review the exclusivity period granted to Sapo for reserved postal services, and invited the public to submit their comments.“The legislative framework requires Sapo to provide such services universally to every citizen in the country, regardless of whether the Post Office derives a financial benefit or not,” it read.Reserved postal services, per the Postal Services Act, include:Conveyance of all letters, postcards, printed matter, small parcels, packages, or wrappers and other postal articles weighing up to 1kg;Issuing and selling postage stamps; and,Providing roadside collection and address boxes.Conveyance of all letters, postcards, printed matter, small parcels, packages, or wrappers and other postal articles weighing up to 1kg;Issuing and selling postage stamps; and,Providing roadside collection and address boxesSection 16(8) of the Postal Services Act requires the Minister of Communications and Digital Technologies to review the exclusivity period every five years or a shorter period that the minister may determine..*This article was first published on MyBroadband and was republished with permission

Ex-CEO demands probe into vanished billions at Post Office

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