The Democratic Alliance (DA) has written to the South African Airways (SAA) Business Rescue Practitioners, Les Matuson and Siviwe Dongwana, to urge them to immediately apply to court to liquidate SAA.
They must do so in terms of section 141. (2)(a)(ii) of the Companies Act in order to prevent further wasteful bailouts of SAA that are desperately needed to fight the Covid-19 pandemic in South Africa.
Section 132.(3) of the Companies Act requires that if a company’s business rescue proceedings have not ended within three months after the start of those proceedings, the business rescue practitioner must prepare a monthly report on the progress of the business rescue proceedings and submit such reports to the Court or the Companies and Intellectual Property Commission (CIPC).
The three months for the SAA proceedings ended on the 5th of March 2020 and the first report should already have been submitted. We have therefore asked for copies of their reports submitted in terms of section 132.(3) of the Companies Act.
According to media reports, the Business Rescue Practitioners have asked creditors for yet another extension to submit their proposed SAA business rescue plan. They are apparently citing the Covid-19 pandemic as the reason for their request.
However, the SAA Business Rescue Practitioners, have already had four months, which is considerably more than the period stipulated in the Companies Act and should have presented their business rescue plan to creditors on the 28th of February 2020 before the extension to the 31st of March 2020.
The complete lack of any urgency on the part of Matuson and Dongwana to get the business rescue plan approved is a clear indication that the entire business rescue process is a farce and has been so from the very beginning.
Given the collapse of ticket sales income as a result of the Covid-19 pandemic, on top of the dire financial position of the airline, it would be immoral for the SAA creditors to grant the SAA Business Rescue Practitioners yet another extension to submit their proposed SAA business rescue plan. Such an extension will simply delay the inevitable collapse of SAA and cause billions of rands desperately needed to deal with the Covid-19 pandemic to go down the drain.
Instead of fixing the problem, Matuson and Dongwana have become complicit in ensuring that SAA continues to trade at the expense of now not only the poor and the hungry but also of the thousands of South Africans who are and will be at risk of Covid-19 death.