SAA: Finance Committee accedes to DA request to probe national carrier execs
23 August 2016
The DA has finally been able to ensure that SAA brief the Standing Committee on Finance (SCOF) on 20 September 2016.
The DA expects this briefing to include the many issues of reckless trading that we have highlighted time and again. We expect both the Minister of Finance and SAA Board Chairperson, Dudu Myeni, to be present to answer questions put to them by members of the committee. SAA is in a governance and financial crisis and there must be no limitation on the time available to the finance committee to fully interrogate Ms Myeni, National Treasury officials and SAA officials even if this means that the meeting extends into the night.
I will therefore write to the Chairperson of the Finance Committee, Yunus Carrim, to request that arrangements are made with Parliament for committee members to be excused from any sitting of Parliament on that day as well as to write to the Minister of Finance, National Treasury and the SAA delegation to advise them to be available for the entire day on the 20th of September for as long as it takes for the finance committee to do its oversight work.
In addition; the directors, including Ms Myeni, must be held personally liable in terms of section 77(3) of the Companies Act of 2008 for all the losses incurred by SAA.
The Minister of Finance, Pravin Gordhan, is empowered by the Companies Act to initiate proceedings to place SAA into business rescue. We will be urging him to consider business rescue in light of the impasse that has arisen over board reshuffles and the removal of controversial SAA Chairperson, Dudu Myeni.
A clear example of this is the amateurish reasoning the SAA board employed to appoint Sylvain Bosc at a monthly salary of R 260 000 per month or an estimated R 3 380 000 per annum, an amount that exceeds the already excessive salary of President Zuma by R 505 000. This salary package defies the logic of any reasonable person particularly in light of the fact that Bosc was suspended, presumably by Dudu Myeni’s board, on full pay a mere 14 months after his appointment.
Surely in an appointment contract at this level and at this cost there must have been subject to stringent performance requirements of Bosc. It is mind-boggling that if there were any performance requirements, why Bosc was suspended on full pay at all and why after 10 months on suspension and having cost the taxpayer a whopping R 2.6 million whilst doing no work at all.
At an estimated gross profit of R 1000 per economy class passenger from Johannesburg to Durban it means that SAA have to sell over 250 economy class seats from Johannesburg to Durban every month in order to generate enough gross profit just to pay Bosc the R 260 000 that he is reputed to be paid.
This is yet another SAA debacle that continues to cost the country and its citizens. A week ago it was the High Court judgement ordering SAA to pay R 104.6 million plus interest to Nationwide Airlines as a result of SAA’s anticompetitive behaviour. This week it is the possible cancelation of the SAA licence to fly into Hong Kong due to the lack of operating capital and this is topped-off with a suspended Bosc who has cost the airline an estimated R 6.76 million since his appointment in August 2014 and apparently for no benefit only increased losses.
SAA has now gone way beyond being fixed by a mere reconstitution of the board even if Ms Myeni is fired. The airline is bankrupt and on the verge of liquidation. We once again repeat that the only salvation for SAA is that it must be placed under business rescue, with immediate effect and with a clear mandate for its full privatisation.
Issued by Alf Lees, DA Deputy Shadow Minister of Finance, 23 August 2016
