24 September 2017

South Africa: Bailing Out SAA With Pension Funds Is Unethical - DA

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(file photo).

It's unethical to use citizens' hard-earned pension funds to rescue the failing SAA once again, the DA said on Sunday.

This followed a report in Business Times that SAA chairperson Dudu Myeni has asked the Public Investment Corporation (PIC) for a R6bn bailout for the airline, which DA deputy spokesperson on finance Alf Lees said she had "basically run into the ground".

"While the PIC reportedly refused these requests, this is yet another reason, to add to the mountain of reasons to remove Myeni. She now appears to be involved in the planned raid on pensioners' money to prop up SAA and other bankrupt State-Owned Enterprises," Lees said in a statement.

"PIC boss, Dan Matjila, apparently had to answer to allegations against him that were mysteriously apparently leaked after he turned down Myeni's request. It's concerning that Matjila is apparently unable to do his job without political interference."

Matjila told Business Times Myeni was "reportedly furious" after he declined the loan.

He told the newspaper that "politically connected people" had made a number of requests for transactions that didn't meet PIC's investment conditions.

Lees argued that Myeni's presence on the SAA board was not prudent or a legal requirement, saying it is "downright irrational and completely irresponsible" of Finance Minister Malusi Gigaba to "try to find technical means to retain" her.

Gigaba told Parliament's standing committee on finance that Myeni's contract is legal, after the Companies and Intellectual Property Commission (CIPC) said her extended tenure in September was not, according to its laws.

R10bn funding crisis

"SAA has been in constant need of rescuing, facing a R10 billion funding crisis in a few days' time. The setbacks for SAA continue to pile up - Citibank has reportedly refused to extend their R1.8 billion loan beyond the 30th of September 2017; the balance of the lenders of the R6.8 billion due for payment by the 30th of September 2017 has apparently indicated their reluctance to extend their loans particularly if Myeni remains on the SAA board; the international ratings agencies are watching how Gigaba handles the SAA crisis very closely; and there is no time left for any special appropriation bill to be passed by Parliament before the 30th of September 2017."

Lees said with Matjila facing an internal audit for "doing his job", it was "difficult to have faith in the PIC when the politically connected seek access to the R1.9 trillion of pension money that Matjila manages to further enrich themselves".

"It's unethical to use the citizens' hard-earned pension funds to rescue the failing SAA, once again.

"Despite all this, Gigaba is prepared to put the economic future of South Africa, and the 9.3 million unemployed South Africans, at risk in order to comply with the wishes of President Jacob Zuma to keep his close friend Dudu Myeni on the SAA board," Lees claimed.

Source: News24

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