South Africans have had enough of bailing out SAA
26 November 2019
Since 1994, the South African taxpayer has paid bailouts that amount to R57 billion to South African Airways (SAA).
SAA is bankrupt. The organisation is riddled with cadre deployment, corruption and entitlement amongst the unions representing its 11 000 employees.
Who in their right mind demands any salary increase at all from a bankrupt employer let alone an 8% increase way above inflation? The irony is that they have been granted such an obscene increase by giving away other people’s money.
Just this year alone R5.5 billion in bailouts has already been paid to SAA all of it having to be borrowed at huge expense to future generations.
Despite Section 55 of the Public Finance Management Act (PFMA) that requires that the Accounting Authority submit financial statements within five months of the end of the financial year, the SAA board has not tabled annual financial statements for the past two financial years and is rapidly heading towards the end of the third financial year.
The SAA board directors are simply flouting the law. They seem to think they are above the law and should be lauded for ignoring it!
Section 22 of the Companies Act prohibits any company from continuing to trade when it is unable to pay its debts when they become due. This was made patently clear last week when Pravin Gordhan, the Minister of Public Enterprises, and the SAA board warned employees that SAA might not be able to pay salaries at the end of November.
There can be no doubt that the SAA directors are allowing SAA to trade recklessly and are acting in violation of Section 22 of the Companies Act.
It is not only Dudu Myeni, the corporate warlord, who should be declared a delinquent director. It is unconscionable that the current directors allow SAA to continue to trade recklessly whilst they hold out a begging bowl for ever more bailouts.
The SAA board treats Parliament with complete disdain. Fourteen days ago, SCOPA instructed SAA directors, who agreed, to provide SCOPA with certain documentation within 48 hours. SAA is due to appear before SCOPA again on Wednesday and yet none of the documents requested from SAA have yet been provided.
The board director who glibly quotes an unsupported figure of more than R40 billion that it would cost to liquidate SAA is clearly attempting to frighten Parliament into agreeing to more bailouts.
South Africans from all walks of life whether very poor or very rich have had enough of massive bailouts for SAA and it is only the ANC and the trade unions who stubbornly persist with maintaining SAA as a State-Owned Entity.
SAA must be put into business rescue, the Government guaranteed debt must be paid and the airline must be sold for whatever the best offer received from Branson, Emirates Airlines, Ethiopian Airlines or any other buyer is!
That is bottom line!
Issued by Alf Lees, DA Member on the Standing Committee on Public Accounts, 26 November 2019
