DA to ask the CIPC to review the business rescue process at SAA
28 May 2020
The Democratic Alliance (DA) will write to the Companies and Intellectual Property Commission (CIPC) requesting that it reviews the fiduciary validity of the business rescue process at South African Airways (SAA), in terms of Chapter 6 of the Companies Act 2008 (Act 71 of 2008).
The letter that SAA’s Business Rescue Practitioners (BRPs) sent to creditors yesterday all but confirms that the business rescue process at SAA has become politically contaminated and cannot be allowed to continue.
SAA’s BRPs have succumbed to political pressure from the Minister of Public Enterprises, Pravin Gordhan, and are now making decisions based on the Minister’s inane and vain desire for a new state funded airline.
In a 360 degree turn from their previous position that the airline should be liquidated, the BRPs are now of the view that:
"…there is still a reasonable prospect of rescuing SAA, subject to the receipt of unequivocal commitment thereto and the requisite funding, and that will be set out in the business rescue plan to be published in due course."
This change in course follows a spirited political campaign by Gordhan to discredit the business rescue process and resurrect the folly of failure by calling for the establishment of a new state airline. That the BRPs are now singing from the same hymn book as Gordhan clearly shows that the minister has hijacked the process.
Even more alarming is the request by the BRPs for new funding to facilitate their salvage process, this despite postponing the publication of a business rescue plan for SAA twice.
Political interference in a business rescue process goes against the letter and spirit of the Companies Act. The CIPC has an obligation to ensure that a bad precedent on business rescue is not set with SAA, failure to which there could be far reaching long-term consequences for prudent corporate governance in South Africa.
Issued by GhalebCachalia,DA Shadow Minister of Public Enterprises, 28 May 2020