The CF Beyers Naude Development Foundation (BNDF), an NGO in Alexandra, Johannesburg, established in honour of anti-apartheid cleric Dr Beyers Naude, was this week liquidated in the Johannesburg high court.
The move followed an application to the court last month by the Norwegian Agency for Development (Norad) to wind up the BNDF because it could not account for a R1,8-million grant earmarked to assist Alexandra's tertiary education students with bursaries.
The BNDF was formed in 1992.
Cleric and Alexandra civic activist Dr Sam Buti was the founding chairperson and has been at the helm ever since.
A liquidator is now set to be appointed next week by the master of the high court, and lawyers for the Norwegians say an insolvency inquiry, which may result in criminal charges being pressed against whomever is accused, is under way.
In papers before the court, Norad said the BNDF had taken the bulk of the money donated, R1,6-million, and invested it with Sanlam as "an insurance endowment policy".
According to Norad, there was little hope of recovering the money from the BNDF: "We have learnt that the policy was ceded to Nedbank as security for the loan."
Nedcor has also obtained a default judgment against the BNDF after it failed to repay a R320 000 loan used to fund an overseas trip for BNDF leaders.
It is understood that the BNDF is also indebted to another major bank, at which it was given an overdraft facility.
Another loan to the foundation, also outstanding, was provided by a chainstore group.
Meanwhile Naude, who held no responsibility for the BNDF's functioning, said: "I am very sad that this has happened. I pray that the Norwegians continue to pay for those students who are already being funded by the foundation."
Attempts to get comment from Buti were unsuccessful.