NUMSA AND SACCA WILL TAKE LEGAL ACTION TO PREVENT LIQUIDATION OF SAA
5 July 2020
The National Union of Metalworkers of South Africa (NUMSA) and the South African Cabin Crew Association (SACCA) have noted with absolute shock and dismay the recent press statements attributed to Finance Minister Tito Mboweni and the National Treasury Department to the effect that South African Airways (and other State Owned Entities, including SA Express) should be closed down. Mboweni has effectively confirmed that he supports the liquidation of South African Airways (SAA) and SA Express.
Minister Mboweni has been on record making similar reckless statements since 2018, and the most recent position he and his department adopted directly contradicts the official position of Government and more particularly the position of the Department of Public Enterprises, where Minister Gordhan has formally adopted the position that DPE is against the liquidation of SAA. DPE has gone as far as setting up the Leadership Consultative Forum (LCF) emanating from the Compact Agreement, the main purpose of which it to avoid liquidation and to restructure it into a sustainable, profitable and efficient airline.
In fact, this is not the first time that the finance minister makes such comments. Mboweni made his intentions very clear at an investor conference last year, that his wish was that SAA be liquidated and should be given to specific people. We view this as blatant corruption and we wish to be on record that his decision is not only reckless, but well calculated given the timing in order to ensure the liquidation of SAA for his own selfish intentions. The purpose of the statement is intended to undermine any progress to turn around SAA.
The goal is to influence the creditors into voting for liquidation on the 14th of July at the upcoming creditors meeting. Furthermore, Mboweni has contributed to damaging the SAA brand by publicly making this pronouncement.
He has not been held accountable for these statements, and his reckless actions in the past, resulted in the cancelations of future bookings at SAA. It is time for him to be brought to book. It is also worth noting that National Treasury has been complicit in its role at SAA, as it acted as shareholder representative for SAA, during the time when forensic reports were reported on and published at SAA, and yet it refused to act to end mismanagement and looting.
NUMSA and SACCA will not tolerate these irresponsible statements and we call on President Ramaphosa to immediately intervene and fire Mboweni for his recklessness. To the extent that these statements have compromised the independence and credibility of the imminent vote on South African Airways’ Business Rescue Plan, NUMSA and SACCA are in the process of taking legal advice as to the best course of action and all our rights remain reserved.
We want to state emphatically that NUMSA and SACCA will under no circumstances accept the liquidation of SAA, and for that matter also South African Express, or any other State Owned Entity (SOE). Minister Mboweni would be well advised to take due cognizance of the fact that the Companies Act, inclusive of its business rescue and liquidation provisions, are subject to the provisions of the South African Airways Act, 5 of 2007, which Act states the following in its preamble:
“And since the State has a developmental orientation and regards South African Airways as a national carrier and strategic asset that would enable the State to preserve its agility to contribute to key domestic, intra-regional and international air linkages, the State intends to retain it as a national carrier.”
Just as a Government department or a Municipality cannot be liquidated, NUMSA and SACCA do not accept that a State Owned Entity can be liquidated under the artificial guise of these entities being separated into legal entities, despite the fact that government had full control over their demise as a consequence of corruption and mismanagement, and did nothing to stop the rot.
In the case of SA Express, government has not lifted a finger to ensure that workers’ salaries are paid. Workers have had no income since February, and it has also failed to prevent the airline from being placed under provisional liquidation. To the extent necessary this will be legally tested in the Constitutional Court.
However, for the present and as far as South African Airways is concerned, NUMSA and SACCA most certainly do not accept that the airline can be liquidated without, at the very least, such liquidation being approved by Parliament.
We have accordingly instructed our lawyers to prepare a legal challenge in order to ensure that those who are intent on liquidating South African Airways will be stopped in their tracks and workers can be assured that we will leave no stone unturned in protecting their rights and interests in these difficult times.
Statement issued by Irvin Jim, NUMSA General Secretary, and Zazi Nsibanyoni-Mugambi, SACCA President, 5 July 2020
