Public Enterprises department didn’t want to save Mango

Mango’s story has become a tale of forked tongues and manoeuvring at the expense of 749 unpaid staff members.

In the race to business rescue, the Public Enterprises Minister Pravin Gordhan and SAA are falling behind. This after the CIPC (Company and Intellectual Property Commission) rejected the airline’s application for business rescue citing that it had filed three months too late.

It is a requirement that companies file for protection five days after a Board resolution to do so. The pair only attempted to file for business rescue once Mango staff sought High Court relief, set for Tuesday 3 August.

Mango has now added the CIPC as the third respondent in its eventual response to legal action by labour. The airline’s chief executive William Ndlovu grapples with the fact that a state institution has drawn the line at the law and not in favour of another tentacle of state.

“Not surprisingly the DPE is again trying to bend the rules to its will,” said Mango Pilot’s Association Chair Jordan Butler.

The CIPC rejected Mango’s filing on the grounds that it did not have a properly constituted Board at the time of its resolution and the exceedance of the timeline.

“The impotent board have contemplated this crucial business decision over a year and at the critical moment, scored an own goal,” said an angry Butler.

Mango is bound by the Companies Act and the PFMA (Public Finance Management Act) and Minister Gordhan allowed for business rescue only on 22 July – this exceeded at a multiple of 18 the five-day window prescribed to file for business rescue following a Board resolution to do so.

Watch Mango staff speak out

But it seems as if the DPE and SAA “spoke with forked tongues.” DPE never intended to save Mango. In Ndlovu’s affidavit, seen by The Citizen, it says as much with a letter by former SAA interim Board chair Geoff Qhena to Gordhan at the end of April confirming that Public Enterprises favoured winding down Mango.

Just over a month later, he announced budget airline Lift founder – and Harith’s Takatso consortium partner – Gidon Novick as preferred equity partners for SAA 2.0. Last week DPE told The Citizen how it viewed business rescue as a better option than liquidation.

“After being asked by the shareholder to be trusted, it’s terrifying to think what may have happened if we had indeed trusted them,” says SACCA President Zazi Nsibanyoni-Mugambi.

“There are unknown intentions at play here and we believe the shareholder is simply not being honest with us.”

The DA’s Alf Lees is shocked that Public Enterprises continued to push for subsidiary funding at the same time as deciding that winding up Mango was best.

He says that insofar, the “Mango board resolution dated the 16^th of April 2021 to apply for Mango to be placed in Business Rescue that it seems inconceivable that Pravin Gordhan and Kgathatso Thakudi, director General of the Department of Public Enterprises were not aware of the letter. Gordhan, seemingly had no intention of saving Mango even as they pushed the SAA Special Appropriations Bill through Parliament.”

He adds that it seems that both Pravin Gordhan and Kgathatso Thakudi may well have outright lied to parliament. This is why labour has been agitating for the responsible disbursement of the funds in a joint business rescue effort, says Jordan

Also Read: Mango Crisis Could Have Been Avoided

In his affidavit, Ndlovu also describes how Mango lost R 157 million in the financial year that ended on 28 February. Just a bit more than what employees are owed presently, all in, equivalent to 8-month’s pay when adding involuntary cuts and the recent non-payment of salaries for June and July.

Earlier in the week, SAA tried to strongarm labour by carroting bridging finance to Mango that would have settled a single month’s pay if the unions withdrew its application for business rescue.

In a WhatsApp message seen by The Citizen, sent “to Mango Executive Committee members, Ndlovu said: “Good morning colleagues. SAA will not give us money for salaries. They insist that we must wait for the R819m. Apparently, it is with DPE already. We will only start operating once we are in business rescue. We could be in business rescue as early as Tuesday depending on who wins the race between SAA and the Union.”

Mango is currently grounded for non-payment of bills to ATNS (Air Traffic Navigation Services). SAA interim chief executive Thomas Kgokolo presently serves on the ATNS Board and previously served as interim chief executive at the state-owned service provider. The airline was also grounded end April for non-payment to ACSA

“The urgent and dire situation compounds with each passing day. What is clear now is that there can be no way that the joint unions, (the Mango Pilot’s Association, NUMSA and the South African Cabin Crew Association), would retract their application. Now that the shareholders disingenuous intentions are clear, it is even more imperative that we have a seat at the table in the business rescue process.”

Lees adds that “The DA will do everything in its power to expose the truth about the possible role that Pravin Gordhan, the Minister of Public Enterprises, and Kgathatso Thakudi, director General of the Department of Public Enterprises, may have played in misleading or possibly even lying to Parliament about the planned future for Mango as well as the seeming intention never to pay out the R819,0million bailout for Mango.”

Labour also invited creditors to join them in the application and Butler says it’s gaining traction.

“We will not give that up!”