DA mistakes cost Tshwane council R2.1 billion due to missed bond auction

DA mistakes cost Tshwane council R2.1 billion due to missed bond auction

- The Democratic Alliance (DA) led City of Tshwane council has missed an opportunity to alleviate some financial strain when it cancelled a R2.1 billion bond auction

- The cancellation comes after the DA encountered procedural errors with the Auditor-General’s procedures

- The council had planned to use the money to finance capital expenditure projects

PAY ATTENTION: Click "See First" under the "Following" tab to see Briefly news on your News Feed!

The City of Tshwane council which is led by the Democratic Alliance (DA) has missed an opportunity to alleviate some of the current financial strains faced in the country when it was forced to cancel its first bond auction in five-years. The auction was set to raise around R2.1 billion for the council.

Ironically for the DA which prides itself on a record of clean governance and following proper and prescribed procedures, the cancellation was caused by a procedural error between the council and the Auditor-General’s (AG) office.

READ ALSO: Duduzane Zuma to appear in court for culpable homicide charges

The AG’s office declined to issue what is known as a letter of comfort after the error occurred which forced the council to abandon its first attempt to auction its bonds.

Briefly.co.za gathered that a letter of comfort serves as an assurance from the AG’s office to those purchasing the bonds that the obligation attached to that bond would ultimately be met.

The council earlier said it intended to use the money it raised through the auction to finance capital expenditure projects throughout the capital.

TimesLive.co.za reported that Tshwane city manager Moeketsi Mosola confirmed that the auction had been delayed due to a procedural error and the letter of comfort not being issued by the AG’s office.

Mosola said the cancellation had nothing to do with the financial status of the city and noted that the offers received by the city had been more than double the amount which it had estimated initially.

The council is understood to be in the process of renewing its application and will presumably have all the required documents in place when it makes its second attempt to hold the bond auction sometime next week.

READ ALSO: Moyane to Ramaphosa: Stop SARS inquiries or face legal actions

For more amazing, funny and informative videos, please visit Briefly South Africa's YouTube Channel.

Do you have a story to share with Briefly? Visit our Facebook page where you can send us a message or leave us a comment. Your story could be shared online.

To stay up to date with the latest news, download our news app on iTunes or GooglePlay today.

Source: Briefly.co.za

Related news
Malema: The financial sector must be disrupted to empower black people

Malema: The financial sector must be disrupted to empower black people

Malema: The financial sector must be disrupted to empower black people
Briefly.co.za
Mailfire view pixel