DA to write to CIPC as ‘Gordhan hijacked SAA’s rescue process’

The Democratic Alliance (DA) announced that it will write to the Companies and Intellectual Property Commission (CIPC) to request that the commission reviews the “fiduciary validity” of South African Airways’s (SAA) business rescue process.

“The letter that SAA’s business rescue practitioners (BRPs) sent to creditors yesterday, all but confirms that the business rescue process at SAA has become politically contaminated and cannot be allowed to continue,” DA MP Ghaleb Cachalia said in a statement on Thursday.

Cachalia said the airline’s BRPs had succumbed to political pressure from Minister of Public Enterprises Pravin Gordhan, and were now making decisions based on the minister’s “inane and vain” desire for a new state-funded airline.

The MP pointed out that the BRPs’ decision to declare that the airline should not be liquidated was motivated by Gordan.

“While the BRPs are of view that: ‘…there is still a reasonable prospect of rescuing SAA, subject to the receipt of unequivocal commitment thereto and the requisite funding, and that will be set out in the business rescue plan to be published in due course.’

“This change in course follows a spirited political campaign by Gordhan to discredit the business rescue process and resurrect the folly of failure by calling for the establishment of a new state airline.

“That the BRPs are now singing from the same hymn book as Gordhan clearly shows that the minister has hijacked the process,” he said.

Cachalia further said that the request by the BRPs for new funding to facilitate their “salvage process” was alarming, despite postponing the publication of a business rescue plan for the airline twice.

He added that “political interference” in the business rescue process goes against the letter that was sent to the creditors and spirit of the Chapter 6 of the Companies Act 2008 (Act 71 of 2008).

“The CIPC has an obligation to ensure that a bad precedent on business rescue is not set with SAA, failure to which there could be far reaching long-term consequences for prudent corporate governance in South Africa,” he concluded.

Meanwhile on Thursday, SAA announced that its reported plans to have flights in June had been denied by the company’s BRPs.

According to the BRPs, Les Matuson and Siviwe Dongwana, the statement was not “vetted” by them, and that there was no clarity yet on what would be allowed under level 3 of the lockdown.

The statement on SAA’s website said that the resumption of flights between Johannesburg and Cape Town was being planned for mid-June.

(Compiled by Molefe Seeletsa)

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