SAA compounds its misery with parliament no-show

South African Airways (SAA) could be in breach of the law and dragged before the parliamentary standing committee on public accounts (Scopa) for failing to attend a committee meeting and to submit its financial statements on Wednesday this week.

By not appearing after being notified about the meeting, SAA contravened section 55 of the Public Finance Management Act. Also, in terms of the law, the committee has the power to force SAA via a subpoena to appear before it.

Scopa members expressed disappointment when the committee received a last-minute e-mail from the airline informing committee chairperson Mkhuleko Hlengwa of its non-availability.

It was expected to submit its annual report and a legal opinion stating why it should not be placed in business rescue.

SAA has failed to present its financial statements for the last two financial years.

It gave no reason for not attending but it is understood that SAA leadership wanted to avoid an audit by the auditor-general’s office because it feared getting a disclaimer report.

Earlier, SAA non-executive director Martin Kingston said if SAA prepared financial statements on the basis of being a going concern there was a risk of receiving a disclaimed audit opinion, which it was not prepared to shoulder.

The other option was to prepare the statements on the basis of liquidation, but this would have catastrophic consequences.

Hlengwa said Scopa was considering a legal opinion it sought from the parliamentary legal services on the non-attendance by the SAA leadership.

He said the committee had decided to visit SAA on Thursday next week to hold discussions with the board, the department of public enterprises, National Treasury and the auditor-general’s office.

It planned to engage Public Enterprises Minister Pravin Gordhan to assist SAA in dealing with its challenges and to ensure it delivered the outstanding financial statements.

Democratic Alliance committee member Alf Lees condemned SAA’s “blatant lack of cooperation” with parliament.

“SAA’s arrogance is incredible, especially given the fact that this state-owned entity [SOE] has cost taxpayers R57 billion and continues to operate at massive losses with no benefit to the poor.

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

The airline has just emerged from a crippling strike by disgruntled members of the National Union of Metalworkers of South Africa and the South Africa Cabin Crew Association. The strike ended when the strikers accepted a 5.9% wage increase, with SAA promising a further increase when its financial position was back to normal.

“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,” Lees said.

SAA spokesperson Tlali Tlali said the airline denies any suggestion it had not cooperated fully with parliament. It had permission from Hlengwa to have its appearance deferred.

He said the SAA board and executive committee arrived in Cape Town on Wednesday in time to present a comprehensive report to Scopa at the scheduled time, 6pm.

“The permission to defer the meeting had not been received at the time the SAA team departed from Johannesburg.

“Given the significant and ongoing developments in respect of the sustainability of the airline, SAA welcomed the deferment. Arrangements are being finalised for Scopa to visit SAA next week.

“All information requested has been submitted to the shareholder,” he said.

– ericn@citizen.co.za

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