Scopa welcomes decision to turn down SAA for extra funding

South African Airways. Image: Shutterstock

The committee believes that SAA cannot keep on requesting bailouts from the government while refusing to table financials on how the bailouts were being used.

The Standing Committee on Public Accounts (Scopa) welcomed the decision by Minister of Public Enterprises, Pravin Gordhan to turn down the request from the South African Airways (SAA) business rescue practitioners for R10 billion in extra funding.

“Scopa believes that the decision taken by the minister is correct as SAA cannot want its cake and eat it,” the committee said in a statement on Wednesday.

The committee said the airline had handicapped oversight, despite the best efforts of the committee to hold the airline accountable, by insisting on only tabling financial statements once the business was a going concern.

“This kind of reasoning in itself is irregular as the airline cannot be allowed to sanitise its balance sheet and only submit financials when it is convenient for it to do so.”

The committee added that they believed that SAA could not keep on requesting bailouts from the government while refusing to table financials on how these bailouts were being used.

“This poses a challenge in terms of oversight over the public purse and runs a risk of creating a negative precedent for the state.

“Questions still remain unanswered with regard to the R3.5 billion loan from the Development Bank of Southern Africa (DBSA) that was given to SAA in January this year.”

The committee further said that the loan was granted in the absence of clear information on the financial situation of SAA.

They said the committee held numerous meetings with both SAA and Gordhan on the matter and believed that the airline had reached the end of its rope.

“It is unfortunate that the real casualties of this situation will be the workers of the airline who are forced by this situation to be unemployed.”

On Wednesday, the Economic Freedom Fighters (EFF) slammed the “deliberate collapse” of the airline.

In a statement, the EFF blamed the collapse on Gordhan, who was accused of creating an environment of fiscal uncertainty and “arrogantly” dismissing advisory measures provided by appointed business rescue practitioners.

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