SAA Board wastes another R2.3 billion
31 July 2016
It is clear that there are no bounds to the extent that the SAA board and Chairperson, Dudu Myeni, will go to enrich connected ANC cronies at the expense of the South African taxpayer. Delinquent SAA directors continue to make reckless trading decisions. The reported refusal of Myeni and her board to agree to the Macquarie deal, and its apparent savings in excess of R2.3 billion, is just another another nail in the coffin of a dying SAA.
President Zuma now has no other rational option but to allow the Minister of Finance, Pravin Gordhan, to take action. It seems clear that Zuma has allowed his improper and reportedly intimate relationship, and no doubt the considerable amount of money that seems to have flowed to closely connected ANC cadres, to hinder Gordhan from making sound financial decisions when it comes to SAA - despite what he has repeatedly announced in public since his appointment after SAA Nenegate in December 2015.
Minister Gordhan, has not been able to implement the turnaround plan that he announced in February 2016, seemingly blocked by President Zuma. This plan included the restructuring of the SAA board, the possible partial privatisation of SAA and the amalgamation of SAA with SA Express. Consequently, the Minister has resisted the attempts by SAA to obtain further funding guarantees from the State. The stalemate seems now to be between Minister Gordhan and President Zuma - in the meantime Ms Myeni is rapidly driving SAA to total collapse.
It is clear that President Zuma cannot be relied on to make the right decision when it comes to SAA. The DA therefore calls upon Minister Gordhan to take the next logical step and place SAA into Business rescue, pursuant to section 131(1) of the Companies Act of 2008, by applying to a high court for an order to place SAA under supervision and commence Business Rescue proceedings as the shareholder representative, an affected party.
The SAA saga continues to have an impact on the chances of a ratings downgrade later this year. SAA simply cannot continue to trade under financially distressed circumstances, requiring yet another bailout from the taxpayer or facing liquidation because of the President's personal and improper relationship with Myeni. If Zuma continues to impede the Minister of Finance from taking control of the national carrier it will be entirely justifiable for international ratings agencies to have little faith in Gordhan being able to manage the South African economy.
The DA will continue to fight for a clean and well-functioning SAA that is competitive, partially-privatised, self-reliant and well-governed. As our economy slides ever closer to recession and unemployment rises, the time for inaction is over. The DA will vigorously seek to bring SAA back to financial health and root out all causes that have led to its insolvency.
Statement issued by Alf Lees MP, DA Deputy Shadow Minister of Finance, 31 July 2016
