SAA’s business rescue practitioners 'raked in over R30m without producing a plan'
SAA’s business rescue practitioners are under fire for raking in over R30 million in fees without producing a plan to save the broke airline, which has lost almost R16 billion in the past three years.
Les Matuson and Siviwe Dongwana were heavily chastised by chairperson of the National Assembly’s standing committee on public accounts Mkhuleko Hlengwa and Public Enterprises Minister Pravin Gordhan.
Gordhan told a virtual meeting of the committee on Friday that a total of R30m was shared between Matuson and Dongwana for between three or four months since their appointment in December.
Dongwana said their hourly rate is regulated by the Companies and Intellectual Property Commission.
“We would be more than happy to provide the fees for the rest of the team to the committee in writing for the duration of the business rescue process including the fees for all the advisors,” he said.
The committee also heard that the national carrier had no money to pay its 4 708-strong workforce this month.
“From May 1 due to the lockdown and the inability to have people working, everyone is on unpaid leave of absence and the company does not, as things stand, have funds to pay salaries for May,” said Dongwana.
Hlengwa said R15m each to Matuson and Dongwana over four months did not sit well with him.
“This operation is not a money-making scheme and it could be more if you tally up the consultants and other work,” he said.
According to Hlengwa, SAA is “bleeding money, bled money, has no money. The fiscus is strained beyond all measures; taxpayers cannot afford to continuously pay for something that has no end in sight”.
Unaudited financial statements for the past two years presented to the committee show that the airline posted over R5bn last year, about R5.5bn and R5.3bn in 2018 and 2017, respectively.
Hlengwa said in the report Matuson and Dongwana are due to submit to the committee on May 26 they must state a date, timeline and deadline when SAA’s rescue will be concluded.
”The bottom line is either you shape up or ship out,” he warned the business rescue practitioners.
Hlengwa continued: “An airline such as SAA cannot just collapse, crash and there are no consequences and nothing happens.
"It’s as if nothing happened, we woke up one morning and SAA had crashed. We need to do the age analysis of this calamity so that consequences can actually be effective”.
He said there was an unhealthy working relationship between business rescue practitioners and the government, which is not in SAA’s interest, and that Matuson and Dongwana and Gordhan were singing from two different hymn sheets.
Dongwana promised the committee that they would soon produce a business rescue plan for SAA’s winding down after engagements with the affected parties and key stakeholders.
”A winding down would yield a better return to creditors and shareholders,” Dongwana said, warning that liquidation would lead to the erosion of value.
But Gordhan was unimpressed, saying he found it astounding that the business rescue practitioners told the committee that their plan was for a winding down and not to rescue SAA.
“I think it is shocking, instead of saying we will deliver a business rescue plan that presents two or three options on which we will consult the relevant players and then decide what the optimal option is,” Gordhan said.
DA MP Alf Lees warned Gordhan against sacrificing the country’s financial well-being through regressive plans of appeasing unions by promising them an unaffordable new airline.