Parliament’s Standing Committee on Public Accounts (Scopa) welcomed, in a statement released to the media on April 15, the decision of the Minister of Public Enterprises to deny an extra funding request from the business rescue practitioners (BRPs) overseeing State-owned national flag carrier South African Airways (SAA). The BRPs had asked for a further R10-billion for the airline.
“Scopa believes that the decision taken by the Minister is correct as SAA cannot want its cake and eat it,” affirmed the Scopa statement. “SAA has handicapped oversight, despite the best efforts of the committee to hold the airline accountable, by insisting on only tabling financial statements once the business is a going concern.”
The committee described the airline’s reasoning on this matter as “irregular” and stated that SAA could not be allowed to “sanitise its balance sheet” nor to submit its financial statements only when it was convenient for the State-owned company to do so. Scopa’s view was that SAA could not keep asking for bailouts while refusing to present its financial statements, which would show how it had used previous bailout funds.
The airline’s refusal to table its financial statements had created an oversight problem regarding the expenditure of public funds. This risked establishing a bad precedent for the State.
In its statement Scopa pointed out that there were unanswered questions about a R3.5-billion loan that SAA had received in January from the Development Bank of Southern Africa. That loan had been given despite the lack of clarity on the airline’s financial situation.
“Scopa has held numerous meetings with both SAA and the Minister on this matter and believes that the airline has reached the end of its rope. It is unfortunate that the real casualties of this situation will be the workers of the airline who are forced by this situation to be unemployed.”
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