The article “Return to sender” (April 2-8, 2026), in which Chris Barron interviewed Mark Barnes, former CEO of the South African Post Office (Sapo), refers.
The article contains factual inaccuracies and raises questions that warrant clarification.
Business rescue proceedings must be understood within their statutory and factual context. In terms of the Companies Act, business rescue is intended to be a temporary process to restore an entity to solvency.
The act determines success in two scenarios. Either the distressed company is restored to solvency and can pay its liabilities when due; or, if that’s not possible, the business rescue achieves a better return for creditors than would result from immediate liquidation.
Distressed companies are rarely able to trade their way out of business rescue. Additional funding in the form of capital (post-commencement funding) is required to keep the business alive and enable the execution of the business rescue plan.
When the department of communications & digital technologies (DCDT), Sapo’s shareholder, approached the court to place Sapo into business rescue, the shareholder committed to providing financial support to implement the business rescue plan.
Two funding tranches were contemplated. The first, of R2.4bn, was received and applied towards implementing the initiatives set out in the plan.
Mr Barnes alleges that we are now seeking to define a “raison d’être” to attract funding from the National Treasury. This is incorrect. The second tranche of R3.8bn was committed by the shareholder in the business rescue court application, contemplated in the plan and remains outstanding. It is required to finalise key aspects of the plan, including infrastructure modernisation and upgrades, working capital requirements and the payment of a conditional top-up dividend to the South African Revenue Service, the Sapo retirement fund and the relevant medical schemes of 18c in the rand.
Mr Barnes’s allegation that the business rescue practitioners (BRPs) have sold assets is incorrect. No assets have been sold, as the minister did not grant approval for any disposals.
Business rescue proceedings must be understood within their statutory and factual context
The business rescue plan, adopted and approved by the majority of creditors, is a binding legal document on all creditors, the shareholder and affected persons. However, at the Treasury’s request, the BRPs and Sapo management developed and presented a complementary turnaround strategy document to the shareholder.
Due to the interventions by the BRPs and implementation of the plan (to the extent allowable by the first funding tranche), the entity is solvent, and all creditors have received a better dividend than they would have in liquidation. It remains the shareholder’s prerogative to implement the strategy as developed by the BRPs, or an amended version as per the shareholder’s full discretion in conjunction with the new board of directors, after the BRPs have exited.
Mr Barnes questions the origin of Sapo’s debt, asserting that there was no debt when he resigned in 2019. The audited financial statements for the year ended March 31 2019 (the last completed financial year when Mr Barnes was CEO) disclose the following:
- Sapo incurred a net loss of R1.1bn;
- R2.947bn was received from the DCDT and Treasury to recapitalise Sapo;
- Trade and other payables amounted to R1.5bn; and
- Sapo had a positive NAV, which included the Postbank funds.
The Postbank was then separated from Sapo and transferred to a new entity. Postbank deposits of R5.1bn and related funds were transferred out of Sapo and onto Postbank’s balance sheet. Liabilities escalated over subsequent years as operational losses were not fully funded by the shareholder. The financial deterioration resulted in a creditor applying for provisional liquidation in February 2023. Sapo was placed into business rescue on July 10 2023.
In response to Mr Barnes’s question of what has been achieved during business rescue, the following achievements should be highlighted:
- Reduction of historical liabilities from about R8.7bn to about R440m;
- Payment of a dividend of about 12c in the rand to concurrent creditors due to a debt compromise, which required 75% of creditors’ approval;
- Restoring the entity to a positive NAV;
- Resizing an unsustainable workforce;
- Funding ongoing operations and branch rationalisation to 657 branches, while maintaining rural and unprofitable branches to uphold Sapo’s social mandate;
- Clearance of the international mail and parcel backlog;
- Restoration of air freight capacity through commercial agreements with international carriers;
- Recovery initiatives targeting outstanding municipal debt and dormant accounts;
- Enhanced financial and governance processes, with disciplinary actions instituted in cases of fraud and theft;
- Launch of the e-registered mail digital platform, creating a new digital revenue stream; and
- Proactive measures to explore possible partnerships with the DCDT.
A request for information for partnerships with Sapo was issued in December 2025; many submissions were received from private sector participants. We did not observe any submission from Mr Barnes.
The assertions made in the article reflect a misunderstanding of the statutory framework governing business rescue and measurable progress realised under challenging circumstances.
Our role has been to lay a credible foundation for the entity’s future. To characterise these efforts as a deviation from our mandate is inaccurate and unjustified.
Rooplal and Damons are the joint Sapo BRPs
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