DA calls for the immediate release of the SAA business rescue plan
16 June 2020
The Democratic Alliance (DA) calls on the South African Airways (SAA) business rescue practitioners (BRPs), Les Matuson and Siviwe Dongwana to immediately release the long-overdue SAA business rescue plan.
It is not surprising that there is still no sign of a business rescue plan despite the expiry of the 15 June 2020 extension the Court granted the BRPs at the eleventh hour on 8 June 2020.
The continuous delays and missed deadlines make a complete mockery of the entire process. It also reaffirms suspicions that the BRPs were never in control of the process because it was intercepted by political meddling.
SAA was placed under business rescue on 5 December 2019 and the BRPs Les Matuson and Siviwe Dongwana were required by the Companies Act to produce a business rescue plan with 25 days. Now some six months (or 194 days) and five creditors-approved extensions later there is still no sign of a business rescue plan emanating from Matuson and Dongwana.
The Minister of Public Enterprises, Pravin Gordhan, has repeatedly stated that the ANC government would not allow SAA to be liquidated. This is seemingly the reason behind Matuson and Dongwana’s apparent failure to follow Section 141 of the Companies Act and file for the liquidation of the airline. Their reluctance has purportedly been based on the pronouncements by Gordhan that SAA will not be allowed to be liquidated and by implication, further taxpayer bailouts will be paid to SAA in the current company or in some reincarnated new company.
Creditors, most of whose debt has been secured by the ANC government, and those creditors who have taken the risk to do unsecured business with SAA, which they knew full well was bankrupt, have no incentive to insist on liquidation. This is because they will either get all their money back from taxpayers whatever the business rescue outcome is or for those unsecured creditors it is better to wait for a further taxpayer bailout rather than to insist on liquidation and a likely low or zero dividend.
In the end, the ANC’s bankrupt vanity project simply rolls on with thousands of employees not having any income nor having any finality to their misery in sight. It will be poor South Africans whose lives will be most affected by the further wasteful payments of R21 billion to keep an “old” or a “new” SAA flying at losses, projected at R 21 billion.
Statement issued by Alf Lees MP - DA Member of the Standing Committee on Public Accounts, 16 June 2020