DA slams SAA’s ‘arrogance’ after no-show in parly

The Democratic Alliance (DA) has lashed out at the South African Airways (SAA) in a statement after the debt-ridden airline pulled out of an appearance at the Standing Committee on Public Accounts (Scopa), where it was meant to explain why it had not submitted financial reports to parliament for the last two years.

The state-owned airline was meant to appear before parliament on Wednesday, but emailed the committee’s chairperson the morning of their meeting to postpone.

According to a tweet from the party, the airline is in breach of section 55 of the Public Finance Management Act. And, in the statement, they also accused the airline’s directors of violating Section 22 of the Companies Act.

“SAA’s arrogance is incredulous, especially given the fact that this state-owned entity has cost taxpayers R57 billion in losses and continues to operate at massive losses and with no benefit to the poor,” said MP Alf Lees in the statement.

“It is no secret that SAA currently finds itself in an insolvent financial situation, which is draining the national fiscus, bailout after bailout.

“This has been compounded by striking workers and grounded flights, which were estimated to have generated losses of over R50 million per day.

“This continued lack of cooperation from SAA will in no doubt provide zero aid to their current dire financial situation, and it makes parliament’s role of oversight increasingly difficult to achieve.

“SAA is insolvent and certainly is not in a position to pay its debts given that the SAA board has stated publicly that it may not have sufficient funds to pay salaries and wages for November 2019.

“Despite the inability to pay its debts, the SAA directors allow SAA to continue trading and this constitutes reckless trading.

“SAA directors are therefore clearly in violation of Section 22 of the Companies Act which prohibits a company from continuing to trade when it is unable to pay its debts when they become due,” the statement says.

READ MORE: Zille questions where government will get money to pay SAA salary increases

In a statement, SAA denied not having cooperated with parliament.

They said their appearance had only been deferred, that they received permission for this from the Scopa chairperson, and that a member of their board delivered a “comprehensive report” to Scopa on the state of the airline at the “originally scheduled time” of 6pm, as the deferment had not yet been granted when the SAA team departed to Cape Town from Johannesburg.

“Given the significant and ongoing developments in respect of the sustainability of the airline, SAA welcomes the deferment of their appearance at Scopa.

“This will enable further urgent engagement with all relevant role players on the support initiatives being developed under the direction of the shareholder.”

The airline said arrangements had been made for members of Scopa to visit next week.

“SAA refutes any suggestion that it has not cooperated fully with parliament.”

In a tweet, the DA called for SAA to be placed under business rescue and for government to stop paying bailouts.

The official opposition appears to be on the same page as Minister of Public Enterprises Pravin Gordhan on this issue, as on November 19 he did indeed say in a statement that the airline would not receive any more handouts from government.

Government is “not in a position to make money available to the airline,” he said.

“The pattern of bailouts has become a moral hazard,” he added.

“Over the last three years, the government has provided more than R20.5 billion of fiscal support to SAA. No further financial resources can be advanced to the carrier. The government is facing severe financial constraints.”

The arrogance is incredulous!#SAA has today failed to appear before the Standing Committee on Public Accounts to explain & account for the fact that they have failed to submit their financial reports to Parliament for the past two financial years.https://t.co/StVXiKelhG

— Democratic Alliance (@Our_DA) November 27, 2019

This means that SAA is in breach of section 55 of the Public Finance Management Act.

Place SAA in Business Rescue and STOP paying bailouts!

— Democratic Alliance (@Our_DA) November 27, 2019

(Compiled by Daniel Friedman)

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