Pravin Gordhan has totally mismanaged SAA’s business rescue process, says Numsa

The National Union of Metalworkers of South Africa (Numsa) has criticised Public Enterprises Minister Pravin Gordhan for the protracted business rescue process at South African Airways (SAA), saying he should take responsibility for mismanaging the airline.

This after Gordhan on Wednesday told Parliament’s public enterprises committee that the BRPs could not be free agents while calling for policy changes at the embattled airline. The minister also said amendments to the Companies Act could help with holding the rescue practitioners more accountable, particularly when it comes to state-owned entities (SOEs).

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But Numsa’s spokesperson Phakamile Hlubi-Majola told The Citizen on Thursday that the minister had to account for the ongoing business rescue process that has been mismanaged under his watch.

“The decision that was taken to place SAA under business rescue, the government is the one that went under voluntary business rescue and they have been controlling the process from day one,” Hlubi-Majola said.

“I think it is really mischievous when Pravin tries to characterise it as if he has no control over the process. He has been controlling and mismanaging it from day one, and that’s why there are so many problems.”

The director-general at the Department of Public Enterprises, Kgathatso Tlhakudi, also indicated to MPs on Wednesday that SAA could exit business rescue by the end of February. Since their appointment in December 2019, the BRPs had already been paid R36 million, Gordhan revealed in June last year.

Last week, the department paid out R1.3 billion to SAA to settle its severance packages with employees, as well as backpay owed. The tranche formed part of the R10.5 billion bailout Finance Minister Tito Mboweni announced in October.

Workers at SAA have not been paid since March 2020, meaning that by the end of January they had been without salaries or benefits for 10 months.

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Numsa and the South African Cabin Crew Association (Sacca) on Monday approached the Labour Court on an urgent basis seeking to compel the department and the airline’s BRPs to pay over three months’ deferred salaries to their members. Judgment was reserved in the matter.

The department and the rescue practitioners struck the same controversial deal with four other unions and three non-unionised worker formations at the airline in December. Two unions have suggested that the outstanding balance of five months’ pay be delayed to later in 2021, or that the money owed to employees be turned into equity.

‘Coordinated PR exercise’

Hlubi-Majola said the BRPs had always maintained their willingness to pay workers their outstanding salaries, but the department had placed conditions on how the money could be paid out.

“What Pravin Gordhan has been doing is really a coordinated PR exercise to cover up for the gross incompetence of the business rescue plan at SAA, which has been totally mismanaged by Minister Pravin Gordhan and has resulted in extreme suffering for workers and their families,” she said.

She said Numsa suspected that the BRPs had been paid as much as R200 million since their appointment.

“It really is a disgrace that workers at SAA have to go to the Labour Court to beg for money which is owed to them when there has been so much rampant wastage, mismanagement, and looting, and all of it happened under the watch of Minister Pravin Gordhan,” Hlubi-Majola said.

She added that the union didn’t believe that the business rescue process could end this month, as suggested by the department.

“Already this business rescue process has gone on far longer than its even normal. It’s a completely abnormal process,” she said.

Additional reporting by Thando Maeko

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