Public Enterprises Minister Pravin Gordhan. Picture: Itumeleng English/African News Agency (ANA) Archives
Public Enterprises Minister Pravin Gordhan. Picture: Itumeleng English/African News Agency (ANA) Archives

DA seeks details of SAA 'leadership compact'

By ANA Reporter Time of article published May 2, 2020

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Cape Town - The "leadership compact" reached by Public Enterprises Minister Pravin Gordhan and trade unions on restructuring cash-strapped South African Airways (SAA) may well be a breakthrough, but the media statement released on Friday is scant on detail, the Democratic Alliance said.

The DA would write to Gordhan to request the full details of the agreement he had entered into with the unions representing SAA employees, DA member of Parliament's standing committee on public accounts (Scopa) Alf Lees said in a statement on Saturday.

"We will also seek a commitment that the ANC government will not make any further bailouts to SAA, nor provide any further government guarantees or any other form of security to the airline," he said.

Gordhan, by way of a media statement on Friday, confirmed the agreement with SAA unions." This agreement may well be a breakthrough, but unfortunately, the media statement is scant on detail. The question that all South Africans will be asking is whether or not this deal includes yet more billions of rand in bailouts to keep the bankrupt airline going and whether or not majority ownership of SAA will be transferred to private equity?"

It was astounding that the unions and Gordhan believed they could enter into a leadership compact that apparently had no details and that the business rescue practitioners (BRPs) Les Matuson and Siviwe Dongwana were then expected to implement. This agreement also seemed to override the decision by the BRPs that employees were required to decide on a retrenchment package by May 1.

Furthermore, the media statement did not make a single reference to the BRPs except that it implied that Gordhan had seemingly taken control of them by establishing “very demanding timelines for the development of the business rescue plan", something that only Matuson and Dongwana could legally do. This demonstrated once again that the minister believed he was in charge and, what was worse, the BRPs were seemingly delinquent by apparently allowing Gordhan to dictate what they should do. It was unbelievable that Matuson and Dongwana could allow themselves to be sidelined in this way, Lees said.

"They have a legal obligation to follow sections 128 to 155 of the Companies Act. The legal mandate of the BRPs is to either devise an acceptable business rescue plan or, failing that, to apply for liquidation. In some five months, Matuson and Dongwana have failed to come up with a business rescue plan of any sort. Despite the failure of the BRPs to produce a business rescue plan within the time limits contained in the Companies Act, they have also failed to apply for liquidation as is required by the Companies Act.

"Matusan and Dongwana need to get their act together and resist any interference from minister Gordhan. The public deserves clarity on the future of SAA and the full details of any agreements the minister has entered into and a guarantee that public money will not be wasted on a lost cause, especially during this time of crisis."

The DA strongly opposed any further bailouts, either in cash or government guarantees as working capital for SAA. Any funding required in terms of the negotiated leadership compact should be raised from investors and not from the taxpayer, Lees said.

African News Agency (ANA)

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