Myeni to be grilled at Finance meeting
18 September 2016
The DA is committed to getting to the bottom of the myriad issues that plague the SAA. At the scheduled appearance of the SAA board and executive before the Standing Committee on Finance in Parliament at 10:00 on Tuesday 20th September it intends to hold those responsible to account.
The 2014/15 SAA Annual Financial Statements tabled late on the 15th of September 2016, even though preliminary and a year overdue, reveal the extent to which the Company has been mismanaged.
According to Minister Gordhan, the finalisation of the 2014/15 report has been delayed because “a number of technical difficulties were raised by the auditors at the last minute”. Consequently the report tabled does not include the Auditors report, nor has it been signed off by the board and could be subject to “material changes”.
It is disconcerting that some 18 months after the end of the financial year and some twelve months after the due date for the report, the Auditors only now raise "technical difficulties”. We suspect that the Auditors will be looking at the anti-competitive claims lodged by Nationwide and Comair airlines that are likely to cost SAA more than R1.1 billion and have not been adequately provided for. These would increase the losses of R 4.67 billion to some R 6 billion or more.
The report highlights just how dire the financial situation at SAA is, whereby it states that the “shareholder has approved a further perpetual guarantee to ensure that SAA remains solvent and has access to sufficient working capital to continue operating as a going concern.” This clearly demonstrates the heavy reliance on the Government backed guarantees.
The report reveals serious management issues:
A massive loss of R4,67 billion for the year, bringing the losses for the three year period to a total of R8,67 billion.
Irregular expenditure went up to R68,5 million, an increase of 241%
Fruitless & wasteful expenditure amounted to R52,7 million, an increase of 275%
Losses in subsidiaries amounted to R214 million, an increase of 62,1%
R224 million worth of aircraft spares were written off as obsolete.
In order to get to the bottom of the issues identified in the report, the DA will relentlessly interrogate Miss Myeni and other executives. Some of the questions that require answers are:
What is SAA’s operational plan in order to avoid further government guarantees?
When SAA will be able to release the government from the R 19 billion government guarantees given to SAA?
Whether or not Dudu Myeni will agree to cease to act as both board chair as well as de facto CEO as instructed by Minister Gordhan?
What bodyguard services Dudu Myeni enjoys at SAA expense?
The DA looks forward to receiving full and comprehensive answers when the committee meets with Dudu Myeni, the Deputy Minister and the National Treasury Director General on Tuesday in Parliament.
Statement issued by Alf Lees MP, DA Shadow Deputy Minister of Finance, 18 September 2016
