DA wants SAA liquidated, calls for commission of inquiry into ‘malfeasance’

Image credit: Flickr/Roderick Eime

The Democratic Alliance (DA) has urged South African Airways’ (SAA) business rescue practitioners to apply for the airline’s liquidation “with immediate effect.”

In a statement on Thursday, Alfred Lees, DA Member of Parliament’s Standing Committee on Public Accounts (SCOPA), said SAA bailouts worth R50 billion since 2009 have “have come at a great cost to the taxpayer.”

The party was reacting to reports that the government has cut funding to SAA. This emerged in a letter dated 10 April by Public Enterprises Minister Pravin Gordhan to the business rescue practitioners, Les Matuson and Siviwe Dongwana.

ANC ‘should take full responsibility’

In his letter, Gordhan said the government’s finances were “stretched” and urged the practitioners to “consider their options within their available resources.”

Lees said SAA and SA Express liquidation “must now proceed in a way that causes the least possible damage to the SA economy as well as to the well being of the innocent employees –  most of whom have likely not been involved in the massive malfeasance at both airlines.”

“It is only right that the African National Congress (ANC) takes responsibility for the consequences that this will have for creditors and employees, as it is the ANC, through the deployment and looting of its incompetent cadres, that has brought a once proud airline to bankruptcy,” Lees added.

He said Gordhan and Finance Minister Tito Mboweni must ensure SAA and SA Express employees get their full Pay As You Earn (PAYE), Unemployment Insurance Fund (UIF), pension and medical aid benefits.

Commission of inquiry

Lees added that he has requested President Cyril Ramaphosa to appoint a judicial commission of inquiry into “malfeasance” at SAA and SA Express since 2009.

“The terms of reference for such an investigation must go much further than the Zondo Commission of Inquiry and must include a full forensic investigation to ensure that the persons who have been a guilty of wrongdoing are held accountable and lose their ill-gotten gains and, where appropriate, get jail terms,” he said.

At its meeting on Wednesday, the Cabinet directed Gordhan to prepare an “updated report” on SAA for discussion at its next meeting scheduled for Monday, 20 April.

In a statement on Tuesday, Gordhan also said his department is in continuous engagement with the airline’s business rescue practitioners.

“Working with the business rescue practitioners, government must urgently determine the operating and business model for a rescued airline, with a sustainable financial model,” he said.

Although the DA favours liquidation, the Economic Freedom Fighters (EFF) remains opposed to it and has accused Gordhan of “deliberately collapsing” SAA.

The ANC’s alliance partners – the SA Communist Party and labour federation COSATU – have called for a state-backed recapitalisation of the airline.

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