SAA Business Rescue Update & SIU investigations: with DPE Minister & Deputy present (postponed)

Public Accounts (SCOPA)

16 March 2021
Chairperson: Mr M Hlengwa (IFP)
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Meeting Summary

Video: Standing Committee on Public Accounts

Business Rescue of SAA

04 Nov 2020

SAA Business Rescue Plan: Engagement with Minister, DPE & Business Rescue Practitioners

15 May 2020

Business rescue plans for SAA: Engagement with Public Enterprises Ministry & Business Rescue Practitioners

In this virtual meeting, the Committee was supposed to meet with SAA and the SAA Business Rescue Practitioners on the latter’s progress.

The Committee Chairperson brought the letter from the Business Rescue Practitioners to the attention of the Committee. The letter was sent to the Committee the evening before and indicated that one of the Business Rescue Practitioners had suffered a bereavement.

The Chairperson requested guidance from members regarding the postponement of the scheduled meeting with South African Airways, the Business Rescue Practitioners and the Department of Public Enterprises. It was established that no SAA representatives had been sent to the meeting in their place.

Some Members expressed their dissatisfaction at this and highlighted that there was a lack of accountability in terms of South African Airways. It was suggested that South African Airways absence from the meeting might require the Committee to use subpoenas to enforce attendance and accountability.

The Committee requested clarity regarding the inordinate delay in the Committee’s request for the meeting and input from the Business Rescue Practitioners. The Committee highlighted that they continuously heard about a potential private equity partner related to the recovery plan - but no final agreement had been communicated nor what such agreements might contain.

The Committee took note of the fact that this had been a period of much suffering and bereavement. It was noted that in the letter from the Business Rescue Practitioners they had indicated that they had wanted to postpone the meeting to the following week. It was suggested that the Chairperson approach the Chair of Chairs in this regard to permit a meeting during the parliamentary recess.


Meeting report

The Chairperson stated that the Committee was meeting with South African Airways (SAA) and the SAA Business Rescue Practitioners on SAA related matters. He had received a letter from the Business Rescue Practitioners the day before. A response was sent back to them. Both the letter and response had been communicated to the Committee members.

On 3 March 2021 a letter was sent to SAA from the Department of Public Enterprises (DPE) – this was apparently only received by SAA on 10 March 2021. In the letter sent the day before, the Business Rescue Practitioners brought to the Chairperson’s attention that there was a bereavement which affected them. That was why a report or presentation was not received from SAA. The Business Rescue Practitioners indicated that they were unable to finalise the work that was due to the Committee. There was an element of sensitivity that needed to be applied in dealing with the matter, given the bereavement.

The Chairperson said he had indicated in his response to the Business Rescue Practitioners that the Committee would meet that day to take a decision. He generally did not like postponing meetings and he did not like doing so ‘on the side.’ He would bring every correspondence and request to the Committee. He had conveyed the condolences of the Committee to the affected parties and notwithstanding they would proceed that day and consider the matters. Parliament was going into recess on Friday 19 March 2021.

Mr A Lees (DA) requested to know whether SAA and the Business Rescue Practitioners were present in the meeting and whether both parties were affected by the bereavement. He also requested clarity regarding the inordinate delay in the Committee’s request for the meeting and input from the Business Rescue Practitioners.  Someone needed to be held accountable for that – if there was malfeasance or incompetence involved.

There was a massive crisis with SAA, it had been 18 months since the business rescue started. Parliament had budgeted for and paid out money – that was desperately needed for other purposes and yet there was no real ‘comfort’ as to the future of SAA. The Committee repeatedly heard about a ‘potential private equity partner,’ but this just went on month after month. The Committee had not heard of any final agreements or what the final agreements might contain/or not contain. There was no way that this matter could be put off until the next term of Parliament.

He reiterated that the Committee needed to know who was on the call, why there was not at least one Business Practitioner in attendance if the other was affected by the bereavement. He also wanted further clarity as to why exactly the Committee had not received the report that was required. This matter was not a ‘petty cash’ matter, this was major money of the State being spent on an entity that many believe it should not be spent on and yet the Committee was not getting the accountability, not from DPE nor SAA, nor the Business Rescue Practitioners. The Business Rescue Practitioners had taken an excessive R100 million in the process of trying to rescue SAA and the ‘rescue’ did not appear to be happening.

The Chairperson requested to know who from SAA was in attendance at the meeting.

There was no indication of anyone in attendance from SAA.

The Chairperson stated that this was precisely why he was ‘honesty just fed up.’

Ms B van Minnen (DA) wanted to express her extreme displeasure regarding the behaviour of SAA. SAA was completely flouting, any and all attempts to hold it to account. The fact that they have all, despite the letter from the Chairperson, taken the opportunity to essentially be ‘absent without official leave’ (AWOL) from the Committee and Parliament which was there to hold them to account was completely disgraceful. She echoed what Mr Lees had previously stated. She wanted to emphasise that the Standing Committee on Public Accounts (SCOPA) needed to take a much stricter line with them and the Committee needed to look at other options, such as subpoenas. It was not acceptable to Parliament, it was not acceptable to SCOPA, nor to the oversight mechanism of Parliament which represented the interests of South Africans and how their money was spent. When one considered the vast amounts of money that had gone to SAA, the fact that SAA clearly had no desire to be held accountable to report to anybody as to what was happening – it was starting to look like an attempt to essentially loot the coffers of the State. She reiterated that she thought it was totally unacceptable.

Mr S Somyo (ANC) stated that this had been a time where there had been a number of people who had suffered through heavy and hard times in terms of bereavement. The meeting had been arranged for sometime – the Committee Members were justified in crying foul of the fact that there was no report nor any representatives from SAA. There was a paragraph in the letter that indicated that they were not ‘necessarily running away,’ from the Committee or Parliament. The Business Rescue Practitioners had proposed that they be given till the following week to present – so that at least that period of grief would have somewhat subsided. He suggested that the Committee did not blow their anger at this stage. He proposed that the Committee allow the Business Rescue Practitioners that period. He was speaking from his own experience knowing that this was a critical time of bereavement for those who were affected. He pleaded with Members to take that into their hearts, and reserve the issues for the following meeting. He suggested that the Chairperson could approach the Chair of Chairs for a meeting the following week with SAA.

Mr B Hadebe (ANC) stated that it went without saying that all of them were concerned about SAA’s affairs. The Committee was interested in getting an update and progress, as it related to the business rescue process especially given the fact that the business plan was adopted a long time before. The Committee wanted to hold them accountable, especially when it came to the ‘public purse.’

Having considered the letter and the spirit thereof – it indicated a willingness to appear before the Committee. It would be insensitive to not be in a position to allow the Business Rescue Practitioners time to grieve and mourn – he was speaking as an ‘African child,’ – who understood some of these processes and how they affected an individual. The Committee wanted to do its work but that should not be at the expense of circumstances that were beyond their control. He pleaded with Members to accept the apology and to allow time and space – they did not need to get into the details of the bereaved family. He suggested that the Committee treated the matter with the sensitivity it deserved.

There was opportunity for them to present the following week – which the Business Rescue Practitioners had suggested. Parliament would be on recess at that time but that matter could be resolved through the Chair of Chairs as previously suggested by Mr Somyo.

Ms B Zibula (ANC) stated that the issue of SAA was very important. At this point in time, the Committee needed to be sensitive of the issue that caused them not to be present. Given the recess, the Committee needed to decide when they would meet with them. It was important that SAA and the Business Rescue Practitioners came to the Committee and responded. The Committee could not proceed without them. She endorsed the apology of the practitioner.

The Chairperson stated that the matter needed to be dealt with, with the sensitivity it deserved. He had pointed out to the Business Rescue Practitioners the day before that there was not one Business Rescue Practitioner – there were two. It was not without precedent that the Committee could have met with one of the Business Rescue Practitioners.

For the record the correspondence with SAA was sent on 3 March 2021. Therefore, on the part of the Committee, they had covered all their bases as they had given the Business Rescue Practitioners ample time. The Business Rescue Practitioners had said the letter was dated 10 March 2021, but he wanted to ensure the Committee that the correspondence was sent on 3 March 2021. The Committee’s job was not easy and he knew that at times they came under a lot of ‘flack’ – in terms of how they did things generally. He hoped that they would be understood in that context – that they were just trying to do their jobs. These late requests for postponements when correspondence was sent timeously were beginning to become a norm, which would not be acceptable in future. There was an Eskom issue a few weeks prior, and now there was this one. It set into motion a precedent that would make it untenable for the Committee to assert Parliament’s authority on government departments and entities. He said this within the context of the sensitivity they had applied. He wanted the Committee to leave the meeting having understood that generally and specifically he would take a hard line on behalf of the Committee unless circumstances were excruciatingly compelling for them to postpone. It threw a spanner in the works and upset their programme as a Committee. The Committee was meeting three times a week, and even then, they were far from meeting all the obligations that they had. They were working overtime within Parliament’s already packed programme. Everyday counted. If the Committee was corresponding with departments and entities timeously, it was only correct that they did so with the Committee as well. The Committee was then in a position to substitute that day for something else. To receive correspondence almost at the close of business – in the evening – did not speak to a healthy working relationship. He would have expected at the very least for SAA to have sent a representative to the meeting after having indicated to them that the meeting would proceed. They could then have shared with them the determination of the Committee on the matters they had raised. Their absence, with the absence of a representative, circumstances notwithstanding, was totally unacceptable.

He had been in discussion with the House Chair, responsible for Committees, because Parliament had a six-week recess. He had requested permission should the need arise that they be allowed to meet during the recess – which was agreed to. He did not fear a problem in terms of the Committee meeting during the recess. This matter would not stand in abeyance till May 2021. A date would be found by the end of the day and communicated to the Committee. He proposed that the Committee meet the following Tuesday 23 March 2021. Wednesday 24 March 2021 was Cabinet day and the importance of SAA would require that the Minister be present at the meeting.

The cooperation from the Business Rescue Practitioners had so far not been satisfactory. The Business Rescue Practitioners needed to change their attitude in terms of the way they interacted and treated Parliament. The Business Rescue Practitioners had been there since December 2019 – the issue needed to be understood in that context – that headway needed to be made on those issues. This was not a matter of where one stood regarding what should happen to SAA. There were many views out there. The substantive issue that concerned the Committee was that as the Business Rescue Practitioners responsible for SAA – they needed to account. It was public funds. This was the discussion the Committee wanted to have with them on their process. It was not an ideological engagement about the public purse.

Closing Remarks
He would confirm with the house Chair and Chief Whips that the Committee could meet during the recess and they would take it from there. He would send correspondence to the Business Rescue Practitioners in as far as the outcome of the meeting was concerned. Whilst the Committee was sensitive to the bereavement, the authority of the Committee needed to be asserted.

Mr Pravin Gordhan, Minister of Public Enterprises, indicated that he would not be available on Tuesday 23 March 2021 for the meeting, as he had to appear before the Zondo Commission to complete the process he had commenced some time before with the Commission. He asked that the Chairperson take note of that when scheduling the meeting.

The Chairperson stated that the Committee’s Secretariat would communicate with the Minister’s office and they would find an amicable date for the meeting. The works of the Commission was important. The Minister should be present in the engagement with SAA that would take place.

The meeting was adjourned.



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