25 September 2017

South Africa: Gigaba and SAA Board Breach Companies Act

Photo: kev-shine/Flickr
(file photo).
press release

The DA has written to Malusi Gigaba, the Minister of Finance, to request that he urgently provide reasons for why the South African Airways (SAA) annual financial statements are not ready, as is required by law.

Minister Gigaba seems to have been mischievous when he says in his letter of the 20th of September 2017, to the Standing Committee on Finance (SCOF), that it was not foreseeable that the SAA annual financial statements would not be ready in time for an Annual General Meeting, before the 31st of August 2017.

It was completely foreseeable given that SAA is clearly not a "going concern" and that Gigaba himself, as well as the SAA board, were likely to do everything in their power to delay the finalisation of the annual financial statements until they are able to secure funding from the national revenue fund by way of section 16 of the PFMA, the PIC or some other illogical source to enable SAA to be assumed to be a "going concern" for another year.

The SAA board appear to have delayed the annual financial statements despite section 30(1) of the Companies Act, which states that these be finalised within 6 months of the financial year end, which was up on 31st of August 2017.

Therefore, by not ensuring these statements were ready by the stipulated time, they are now in breach of the Companies Act.

The international rating agencies are watching how Minister Gigaba handles the SAA crisis very closely. Right now, he is acting irresponsibly and getting it wrong. It seems that all of this is just to comply with the wishes of President Jacob Zuma to keep his close friend Dudu Myeni on the SAA board.

Malusi Gigaba's reluctance to act decisively to put SAA into business rescue and on the road to either privatisation or, if this proves to be not possible, into liquidation, will very likely only have a heavier toll on the already 9.3 million unemployed South Africans.

5 YEARS LATER, WE'RE STILL WAITING FOR JUSTICE

The Farlam Commission Report was released over 2 years ago, but nothing has been done since then to provide closure on the greatest tragedy of our young democracy.

Alf Lees MP

DA Shadow Deputy Minister of Finance

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