SAA pulls out of SCOPA meeting at the last minute

Issued by Alf Lees MP – DA Member of the Standing Committee on Public Accounts
27 Nov 2019 in News

The Democratic Alliance (DA) is dismayed by the fact that South African Airways (SAA) has today failed to appear before the Standing Committee on Public Accounts (SCOPA) to explain and account for the fact that they have failed to submit their financial reports to Parliament for the past two financial years. This means that SAA is consequently in breach of section 55 of the Public Finance Management Act (PFMA).

SAA was due to appear before SCOPA in a Committee meeting later today, and chose to email the Committee Chairperson this very morning of their non-appearance, announcing that they would not be appearing. The DA condemns SAA’s blatant lack of cooperation with Parliament, and for proceeding into what will now be their third year of missing financial reports.

SAA’s arrogance is incredulous, especially given the fact that this state-owned entity has cost taxpayers R57 billion in losses and continues to operate at massive losses and with no benefit to the poor.

It is no secret that SAA currently finds itself in an insolvent financial situation, which is draining the national fiscus, bailout after bailout. This has been compounded by striking workers and grounded flights, which were estimated to have generated losses of over R50 million per day. This continued lack of cooperation from SAA will in no doubt provide zero aid to their current dire financial situation, and it makes Parliament’s role of oversight increasingly difficult to achieve.

SAA is insolvent and certainly is not in a position to pay its debts given that the SAA board has stated publicly that it may not have sufficient funds to pay salaries and wages for November 2019. Despite the inability to pay its debts the SAA Directors allow SAA to continue trading and this constitutes reckless trading. SAA Directors are therefore clearly in violation of Section 22 of the Companies Act which prohibits a company from continuing to trade when it is unable to pay its debts when they become due.

SAA cannot jet off into the sunset on this issue – their financial reports must be tabled before Parliament, with immediacy, in order for Parliament to begin to assess the way forward for this defunct, insolvent and widely mismanaged public enterprise. The DA once again emphasizes the crisis that SAA is in and that SAA must be placed in Business Rescue and no further bailouts be paid to them.