SAA: Finance Committee meeting must be moved to 31 August to avoid liquidation
26 August 2016
The 20 September meeting of the Standing Committee on Finance (SCOF) with SAA must be brought forward in order to avoid the imminent liquidation of the state-owned airliner. Calling an emergency meeting with SAA is vital in order to ensure that SAA is placed under business rescue before it collapses.
The DA will request an urgent meeting of the Standing Committee on Finance to take place on 31 August 2016.
This week’s shock resignation of board member, Ms Yakhe Kwinana, at SAA as the head of the audit and risk committee, the astounding report that Board Chair Myeni is not able to communicate with Finance Minister Gordhan and Standard Bank requiring repayment of a R250 million loan means that liquidation is increasing become a certainty.
Even worse is that SAA’s R14.4 billion in government guarantees has been completely depleted leaving it without any options. If a further bailout from government is to be avoided SAA must immediately be placed under business rescue.
The first step in the business rescue process being the reshuffling of the SAA board and removing controversial Chairperson, Dudu Myeni. History has proven that no strident actions can occur at SAA with Ms Myeni at the helm.
Kwinana’s resignation was not only a message to the Minister of Finance, that SAA may be liquidated shortly if he does not act, but, her message also resonates clearly to the South African public: that no state owned entity can survive political interference, especially one with close links to the President in the form of Dudu Myeni.
The SAA memorandum of incorporation calls for there to be five board members of which the majority needed to be non-executives. After Kwinana’s resignation, there are only four board members left, of which only two are non-executive. This gives Treasury the directive and legal mandate it needs to reconstitute the board with new members. Treasury needs to act urgently and replace SAA’s board. Kwinana has fallen on her sword in order to save SAA from being liquidated, her sacrifice must not be in vain.
This resignation also leaves the audit chair open, which can only be filled by a non-executive director with a financial background. With the deadline for financials required by Hong Kong given as the 6th September 2016 before they refuse SAA planes landing rights.
SAA financials must be released before the 6th September or else Hong Kong will be just the start of the withdrawal of landing rights epidemic that will spread through to different countries including South Africa.
The DA cares for the vast amount of jobs that will be lost if SAA is liquidated, we believe government should urgently intervene to avoid adding to the unemployment crisis that has led to almost 9 million people being jobless.
Issued by Alf Lees, DA Deputy Shadow Minister of Finance, 26 August 2016
