SAA creditors complete the ‘grand financial heist’ of the defunct airline’s carcass

14 July 2020

Today’s decision by South African Airways (SAA) creditors to vote in favour of the revised business rescue plan was a self-interested ‘grand financial heist’ to reap millions of rands in taxpayer’s money while saddling the fiscus with an expensive ‘dud’ disguised as a new airline.

Despite their reckless lending to SAA over the past decade, with full knowledge that the airline was bankrupt and unable to service its debt, the creditors now stand to benefit off the back of South Africans without any accountability for their actions.

It is a matter of considerable regret that those who obtained taxpayer-backed security for the credit/loans extended to SAA will now be paid the R 16.4 billion, all at the taxpayer’s expense.

As the creditors pat themselves on the back over their ‘grand heist’, South Africa is left grappling with the headache of how the empty Treasury will fund another billion-dollar bailout for the ‘new airline’.

Public Enterprises Minister Pravin Gordhan’s reckless political posturing for a new airline does not alter the fact that South Africa is broke and does not have the fiscal space for any vanity project.

The immorality of the decision made by SAA creditors today is that, hundreds of thousands of South Africans who have lost their jobs due to Covid-19, will now stand by and watch as another R16.6 billion is sunk into a black hole over the next three years, never to be recovered.

By giving the ANC government the greenlight to massage its political ego through this multi-billion dollar nightmare, the creditors have spirited away finds that are desperately needed to cope with the Corona virus as well to stimulate the economy that has been so decimated by the irrational aspects of the Covid-19 lockdown.

Given that the required funds for the business rescue plan are only partly budgeted for, the DA expects that the Minister will, illegally in our opinion, invoke Section 16 of the Public Finance Management Act (PFMA) to provide the funds for this bailout.

Today was a sad day for corporate accountability in South Africa. The country’s struggling economy was sacrificed on the altar of corporate greed.

Issued by Alf Lees, DA Member of the Standing Committee on Public Accounts, 14 July 2020