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DA: Statement by Natasha Michael, Democratic Alliance Shadow Minister of Public Enterprises, on South African Express board (14/08/2012)

14th August 2012

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The DA welcomes the decision by the Minister of Public Enterprises, Malusi Gigaba, to fire the board of the state-owned regional carrier, South African Express (SA Express). The Minister must, however, go one step further and instigate a full investigation into the shoddy record-keeping and financial mismanagement of public funds by SA Express. Guilty parties must be held responsible.

Since last year, the external auditors, Nkonki Incorporated, have filed two “reportable irregularity” reports, on behalf of SA Express, to the independent Regulator of the Board of Auditors. In doing so, SA Express have breached the Companies Act and the Tax Act by failing to prepare financial statements and correctly account for value-added tax. This would indicate a gross mismanagement of public funds and is unacceptable.

Earlier this year, I raised serious concerns in the portfolio committee over the withdrawal of the parastatal’s financial statements. The Minister’s actions today have vindicated our objections and strongly suggest that financial malpractice has taken place.

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The external auditor has reportedly questioned the quality of the information shared with them by the airline’s management. If the board of SA Express were incapable of sharing the correct information with the auditors, then serious questions must be asked as to the competency of those board members. How is it that incompetent employees were appointed to the board in the first place?

Meanwhile, the SA Express management appear to have survived the culling, with Inati Ntshanga set to remain as CEO. The management team, led by the CEO, are ultimately responsible for the airline’s performance, reputation, management and internal controls. As such, management must shoulder a large portion of the blame for the airline’s current plight. Management should not escape scrutiny and any unearthed incompetence should be dealt with.

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The Minister cannot expect ordinary South Africans to accept the lackadaisical handling of public funds. Whilst the appointment of a new board is a step in the right direction, the misdemeanours of the previous board and current management must be addressed.

I will be requesting a full investigation from the Auditor General into the auditing procedures of SA Express and the perceived mismanagement of public funds by the previous board of directors and management team. Getting fired does not absolve you of accountability. The facts of this debacle must be fully disclosed and guilty parties must be held to account.

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