Gupta’s score again as SAA spends R9.4 million on The New Age

11 October 2015

State-owned airline, South African Airways (SAA) has spent R9.4 million on purchasing almost 6 million copies of Gupta-owned newspaper the New Age, despite the embattled airline remaining in financial crisis and relying directly on government funding to remain a going concern.

In a reply to a parliamentary question, the Minister of Finance, Nhlanhla Nene, stated that since March 2011, SAA purchased 5 927 000 copies of The New Age that were supplied to domestic on-board flights, lounges and airports.

The fact that the newspaper is both owned by the politically-connected Gupta family, and has an editorial stance which is unashamedly pro-Zuma, requires Minister Lynne Brown to assure every taxpaying South African that the agreement is above reproach and free from political interference.

I will today write to Minister Brown, requesting she institute an independent probe into the decision making for this expenditure.

The probe must consider whether the President or his acolytes had any influence on the agreement between SAA and the New Age, whether such spending is financially viable given the current state of SAA, and why the New Age was chosen ahead of any other national newspaper. 

There is no doubting the fact that SAA is in a financial crisis. In January this year, SAA received a R6.5 billion guarantee from the Treasury, bringing the total guarantees it has been given to R14.5 billion. Debt costs are expected to amount to R500m for the 2014-15 financial year from R250m in the previous period. SAA reported a R2.5 billion loss in the 2013-14 financial period, up from R1.7bn in the previous financial year.

In addition to this, SAA sees it fit to handsomely compensate its most senior staff. The total remuneration paid to 13 board members in the 2014/15 financial year was a combined R12 631 303, with former CEO and director Monwabisi Kalawe earning a handsome R4 552 981 and CFO Wolf Meyer taking home R3 661 080.

For a State-Owned Entity to be in such a torrid financial situation requires the most astute financial decision making from its management. Therefore Minister Brown needs to show concrete proof indicating that the decision to spend almost R10 million on a newspaper which is owned by the President’s closest friends was a sound one – not one based on political interference. 

The DA will continue to ensure that the well-being of South Africans comes first, and not the Guptas.

Text of parliamentary reply:

NATIONAL ASSEMBLY

QUESTION FOR WRITTEN REPLY

QUESTION NUMBER: 3432 [NW4093E]

DATE OF PUBLICATION: 11 SEPTEMBER 2015

3432.   Mr R A Lees (DA) to ask the Minister of Finance:

(a) What were the (i) total amounts and (ii) breakdown of the specified amounts spent on the New Age newspaper by the SA Airways (SAA) Group in the (aa)(aaa) 2010-11, (bbb) 2011-12, (ccc) 2012-13, (ddd) 2013-14 and (eee) 2014-15 financial years and (bb) since 1 April 2015 and (b) what was the total amount spent on the New Age newspaper by the SAA Group (i) in the specified financial years and (ii) since 1 April 2015?

NW4093E

REPLY:

(aa) SAA started buying The New Age newspaper in March 2011. SAA spent a total amount of R55,200.00 for the Financial Year 2010/11 on The New Age newspaper. During this period, the newspaper was only supplied onboard. The quantities were 24000 copies per month at a cost per copy of R2.30.

(bb) During the Financial Year 2011/12 SAA spent a total of R1, 864 560.00. For the period April to November 2011, the applicable quantities were 24000 copies per month at a cost per copy of R2.30 for onboard use only. For the remainder of the Financial Year, the quantities increased from 24000 per month to 154 000 copies per month at a cost per copy of R2.31 with the newspaper supplied to domestic onboard, Lounges and Airports.

(cc) During the Financial Year 2012/13 SAA total spend on The New Age newspaper was R4,268,880 00. The applicable quantities per month were 154 000 copies at cost per copy of R2.31.

(dd) During the Financial Year 2013/14, SAA total spend on the New Age newspaper was R4, 268 880.00. The applicable monthly quantities and cost per copy remained the same as the previous Financial Year.

(ee) During the 2014/15 Financial Year, SAA total spend was R2, 439 360.00 for the entire Financial Year. SAA spent R1067 220.00 for the first three months period (April to June 2014) of Financial Year 2014/15. For the second semester (July 2014 to March 2015) of financial year 2014/15, the quantities delivered to SAA reduced from 154 000 copies per month to 66000 per month with this newspaper being made available only onboard, as a complimentary item. A total spend of R1, 372 140.00 was incurred on The New Age newspaper for the July 2014 to March 2015 period at a cost per copy of R2.31

(i) The April 2015-March 2016 financial year to date spent as at end August 2015 is R762 300.00. The applicable monthly quantities are 66000 copies at cost per copy of R2.31.

ENDS

Statement issued by Natasha Mazzone MP, DA Shadow Minister of Public Enterprises, 11 October 2015