The liquidation of is inevitable and the "procrastination on the part of the BRPs" will only extend the enormous costs of the business rescue process, the DA said. File picture: Reuters/Rogan Ward
The liquidation of is inevitable and the "procrastination on the part of the BRPs" will only extend the enormous costs of the business rescue process, the DA said. File picture: Reuters/Rogan Ward

SAA BRPs called on to 'act as required by the Companies Act'

By ANA Reporter Time of article published Apr 26, 2020

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Cape Town - Unless there are private investors "knocking at the door", the liquidation of cash-strapped South African Airways (SAA) is inevitable and the "procrastination on the part of the business rescue practitioners" (BRPs) will only extend the enormous costs of the business rescue process, the Democratic Alliance said on Sunday.

The DA had the deepest respect and sympathy for the employees of SAA who now faced an uncertain future and every effort should be made to afford them a fair retrenchment package, DA member of Parliament's standing committee on public accounts (Scopa) said in a statement on Sunday.

The DA statement followed Public Enterprises Minister Pravin Gordhan's disclosure on Saturday night that SAA had received a reprieve with the BRPs agreeing to shelve their liquidation proposals until next Friday, pending further negotiations with all parties concerned

Gordhan had convened a "high-level meeting" on Saturday morning between senior government leadership and representatives of the SAA unions - the South African Transport and Allied Workers' Union (Satawu), the National Union of Metalworkers of South Africa (Numsa), the South African Cabin Crew Association (Sacca), the South African Airways Pilots' Association (Saapa), the National Transport Movement (NTM), the Aviation Union of Southern Africa (Auasa), Solidarity, and the non-unionised staff formation (SAA Labour Unions), the public enterprises department said in a statement.

On Sunday, Lees said it was now time for Gordhan "to remove himself from this process" and SAA BRPs Les Matuson and Siviwe Dongwana to do the work and make the decisions that they were mandated to do. According to the Companies Act, it was the business rescue practitioners' responsibility to carry out the business rescue process.

Over a period of some five months Matuson and Dongwana had "repeatedly delayed producing a business rescue plan and, it seems, have squandered another R5.5 billion in taxpayer bailouts". The fees paid to the BRPs and consultants/associates was reported to amount to an average of R60 million per month. The DA was awaiting a reply to a parliamentary question submitted to Gordhan to confirm whether or not the information regarding the R60 million per month was correct.

"Unless there are private investors knocking at the door, the liquidation of the cash-strapped SAA is inevitable and the procrastination on the part of the BRPs will only extend the enormous costs of the business rescue process. Any effort that keeps wasting money on a dysfunctional business entity like SAA will be a betrayal to all South Africans who have to contend with high levels of unemployment and a floundering economy."

The DA had requested a legal opinion on what action could be taken to ensure that the BRPs could be held accountable for and could be forced to follow the provisions of sections 128 to 155 of the Companies Act, Lees said.

In its statement on Saturday night, the public enterprises department said the purpose of Saturday morning's meeting convened by Gordhan was to discuss the status of the business rescue process, finalise a leadership compact, the process to give input to the business rescue plan, and how the impact of the business rescue process on employees could be mitigated.

In respect of the immediate threat of liquidation, it was agreed with the BRPs that they would not consider an application for liquidation and, in addition, they would suspend the section 189 process and offer to employees until the close of business next Friday, May 1, the department said.

This decision was based on a briefing to the BRPs on the constructive work being done in what was referred to as “The 12 Leadership Consultative Forum”, chaired by Gordhan.

The parties agreed in principle to a groundbreaking leadership compact which committed the leadership of the DPE and unions to a new shared vision, strategic objectives, structures and processes for meaningful engagement, strategic equity partners, including employees, and other elements aimed at building new, fundamentally different cooperative relationships based on a spirit of strategic partnerships.

The vision agreed by the parties was “A national asset which is internationally competitive, viable, sustainable, and profitable”. The leadership recognised the enormity of the challenge, but were unequivocally committed to saving SAA and shining the torch to a new world post Covid-19 in which SAA was a key catalyst for investment and job creation, the department said in the statement.

African News Agency (ANA)

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