Under-fire business rescue practitioners (BRPs) handling the problems at SAA have defended their reorganisational plan.  Reuters
Under-fire business rescue practitioners (BRPs) handling the problems at SAA have defended their reorganisational plan. Reuters

SAA business rescue practitioners level blame at Pravin Gordhan

By Dineo Faku Time of article published May 8, 2020

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JOHANNESBURG - Under-fire business rescue practitioners (BRPs) handling the problems at SAA have defended their reorganisational plan after organised labour joined Public Enterprises Minister Pravin Gordhan in tearing through their processes.

The BRPs told Judge Andre Van Niekerk of the Labour Court yesterday that they decided on retrenchments last month to reorganise SAA through a business rescue plan that would make the struggling airline viable and attractive to stakeholders.

The BRPs blamed Gordhan for his refusal to grant them more bailouts in order to support the extension of the foreign currency borrowing limit to permit foreign financing of the business rescue plan.

“In particular, the government has indicated that it will no longer fund the business, however restructured. This has led the business rescue practitioners to conclude that only two options are available: an orderly winding down of the business or a liquidation,” said the court papers.

Labour unions Numsa and the SA Cabin Crew Association filed an urgent application yesterday requesting that the court declare the Section 189 notices it issued in March as unlawful.

The unions want the right to be considered for the government-sponsored training lay-off scheme instead of being retrenched in terms of the collective agreement.

They said that the retrenchment notices were issued in haste without a thorough consideration of the situation at SAA.

“We say so because the business rescue process has not ended and no plan has been produced,” said the unions in their heads of argument.

On Wednesday, Gordhan criticised the BRPs for over-reliance on consultants to complete the process, charging that they had failed to account for the money they had spent.

Gordhan said consultants had been brought in from overseas, but the BRPs could not show what they had done.

He said the BRPs had failed to cut their fees and only unions had come to the party.

“We have called on the business rescue practitioners themselves and all the consultancies that they have brought in to reduce their fees by anything up to 40percent so that they also contribute like the staff have been contributing to a proper outcome of this process,” Gordhan said.

“We haven't heard from them in this particular regard.”

However, the BRPs defended their actions, charging that they had a legitimate responsibility of facilitating a better return for the creditors or shareholders of the company than would result from immediate liquidation.

They said that SAA and the unions would apply to the Department of Employment and Labour and the Commission for Conciliation Mediation and Arbitration.

“SAA and the unions will discuss and agree which employees will be considered to be placed in the scheme.

"In respect of those employees who are so agreed to be placed, SAA will 'top-up' the shortfall of the basic salary for employees who are placed on the scheme,” said the papers.

BUSINESS REPORT 

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