Johannesburg - The National Treasury has confirmed that it wants to appoint a new board of SAA before it grants a R5 billion guarantee for the tabling of its financials in Parliament.
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The results of SAA have been delayed for 10 months with Finance Minister Pravin Gordhan last week asking for another extension to mid-September. The Treasury said yesterday that it would not be able to grant this guarantee until there was a new board.
Treasury spokeswoman Phumza Macanda said a new board needed to be appointed soon. “The extension allows additional time for the required extensive and careful consideration to be given to the issuance of the guarantee, given the potential implications for the sovereign and for the economy.
“Treasury recognises the need to have a full-strength board with the full range of skills required to oversee the turnaround of the airline and is working to advance the process for appointing such a board,” she said.
Board appointment
Macanda said this process would ensure that properly qualified people were appointed to the board.
However, there was no indication if the appointment of the board would happen before the end of September.
The new deadline for the Minister of Finance to submit the financials is September 15.
It was the fourth time Gordhan had asked for an extension to submit the financials of SAA in the national legislature.
SAA wants to table its annual report with audited financial statements as a going concern. It told Parliament in November that it required R5bn to complete its financials as a going concern.
The cabinet indicated late last year that a new board for SAA had to be appointed.
But a few months later nothing has happened.
The carrier has been marred by controversy and financial mismanagement for years and has been singled out by ratings agencies among other state companies as a risk to the country’s investment grade status.
Last year the Directorate for Priority Crime Investigations said it would open an investigation into financial losses at the national carrier.
The directorate, popularly known as the Hawks, particularly wanted to zero in on suspected corruption involving tenders, contracts and procurement at the national carrier.
Instabilities
The instabilities have seen massive resignations, suspensions and the airline operating with an interim board.
Over the past six years alone, SAA has lost four chief executives – the latest casualty being Monwabisi Kalawe, who resigned with a R2.7 million golden handshake last year after a fallout with board chairwoman Dudu Myeni.
The Treasury said yesterday that the question of the R5bn guarantee had to be looked into a number of factors including appointing a new board.
The board has also come under fire from the Organisation Undoing Tax Abuse (Outa) calling for it to scrap its deal with BnP Capital.
It said shelving the deal was not enough and it wanted SAA to scrap it all together.
Outa maintained that it would take legal action if SAA failed to heed its call as the agreement was unlawful and expensive.
SAA has agreed to pay BnP R256m if it sourced R25bn of its funding.
BUSINESS REPORT