Picture: BUSINESS DAY
Picture: BUSINESS DAY

Friday’s standing committee on public accounts meeting with public enterprieses minister Pravin Gordhan, and the SAA business rescue practitioners, Les Matuson and Siviwe Dongwana, was a clear indication that the minister will do everything in his power to protect the SAA “Spruce Goose” project from liquidation.

Despite a decade of losses — R10bn in the past two years alone — and a virtual collapse of the international airline industry, the minister maintains that it is possible for SAA to rise like a phoenix from the ashes to become an efficient, well managed and profitable state-owned airline.

It seems clear that the SAA business rescue practitioners never intended to follow the full requirements of chapter 6 of the Companies Act, which requires that a business rescue plan be produced within 25 days of the start of the process. After five and a half months, the practitioners have yet to put a plan forward for the creditors’ approval.

Of course, there is very little financial incentive for the practitioners to conclude that SAA cannot be rescued and thus be forced by section 141.(2)(a)(ii) of the Companies Act to apply for SAA’s liquidation. If they took this legally required step it would likely end their ride on the very lucrative business rescue gravy train.

SA taxpayers have already enabled new loans of R5.5bn to SAA since December 5 2019. SAA has nothing to show for these billions but continued bankruptcy. Not even a business rescue plan.

The minister disclosed that Dongwana and Matuson were paid R30m during the first four months of business rescue. In addition, tens of millions were apparently paid to specially appointed team members by the practitioners, including Bongani Nkasana, apparently known as Chairman Mao by SAA staff. It appears that Nkasana is a one-time, if not current, business partner of Dongwana in a business called Adamantem.

While the practitioners are raking it in, SAA flight crews will not be paid for May. Mango employees have not been paid since April 1, and while Mango flight crews have been on unpaid leave since then, management has apparently been paying themselves 50% of their likely exorbitant salaries.

Mango, like SAA, is in deep financial trouble and should have been put into business rescue and dealt with robustly to save it separately from SAA.

Instead of retrenching staff and downsizing the company to ensure its survival and the retainment of some jobs, Mango management thinks it can save all the jobs by putting employees on extended unpaid leave. Had employees, instead, been furloughed, they would have been able to try and find other temporary sources of income.

While Gordhan made an emphatic statement that SAA will not be allowed to be liquidated, Matuson delivered a praise song of Gordhan that would make the best mbongi [a Kikongo word that means “learning place”] jealous, and  Dongwana obfuscated and evaded the critical question of whether it is possible to rescue SAA without any additional funding from the taxpayer, [as] SAA and Mango are left suffering.

Alf Lees MP
DA member of the standing committee on public accounts

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