A last-ditch effort to rescue the e-Skills Academy - which folded in December - has failed, as it has been unable to secure funding for a bailout.
This week, attorneys representing the directors of the academy notified all parties concerned that the academy “has not succeeded in its attempts to secure funding via the potential investor previously identified”.
According to the notice, “the academy has received a demand from one of its creditors to make payment of a substantial amount owed to it, which demand the academy cannot meet”.
Furthermore, it is anticipated that this creditor will shortly file winding-up proceedings against the institution.
At the end of last year, the academy, an initiative conceived at the Presidential International Advisory Council on the Information Society and Development, in August 2007, shut its doors after less than a year of operation.
It is currently not known who the creditor is that filed a demand for payment, nor is it known how much money is owed to it. Attempts to contact the e-Skills Academy's lawyers, as well as CEO Dan Ellappa, were unsuccessful.
Last year, Ellappa expressed confidence that the academy would reopen, as soon as a suitable investor was found.
The Oracle-backed academy ran into trouble last year when its BEE partner, the Makeda Consortium, pulled out after a 12-month involvement. The sticking point was a R13 million loan from the Industrial Development Corporation, which was granted to the consortium, on condition that its shareholders sign personal surety.
It appears the consortium stakeholders were not prepared to do this, and the deal fell through. Attempts, at that stage, to secure other investment partners proved unsuccessful.
BEE is MIA
At start-up, in January last year, the academy was 40% funded by Oracle, which put R10 million towards the initiative, while another 45% (R13 million) was supposed to be funded by an empowerment partner. This money was needed to fund the first year of operations.
Last year, the academy's directors informed shareholders that: “Majority ownership by a BEE investor was set as a condition for the establishment of the academy when the organisation was launched as an IT training and skills development vehicle to support the objectives of the Presidential International Advisory Council on Information Society and Development.
“The decision [to cease operating] has been prompted by the inability to secure an appropriate level of investment from a suitably qualified black economic empowerment partner.”
Earlier, in an effort to save the academy, Ellappa stated the directors were willing to forgo the BEE requirements in a bid to find an investor. “It's about an investor. The BEE requirements are not important right now, we are just seeking someone to come on board,” he said at the time.
This week, the academy's directors said it “is disappointing that the expectations that were set when the academy was launched, as a commitment to the Presidential Information Technology Advisory Council, have not been achieved and that participation in, and support for the initiative, has fallen short of such expectations.
“In light of the current financial position of e-Skills, an application for its winding-up will not be opposed.”
During its time of operation, the academy claims to have trained and placed 250 unemployed youths.
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