OUTA to file submission to halt SAA subsidiaries bailouts
The Organisation Undoing Tax Abuse (OUTA) wants the diversion of R2,7bn originally earmarked for the business rescue of South African Airways (SAA) which will now apparently be used to “purchase equity” in three of its subsidiaries (SAA Technical, Mango and Air Chefs), to be stopped.
“We want these funds to be withheld until submissions made to Parliament and the Standing Committee of Appropriations (SCOA) have been heard, considered and decided on in Parliament,” says Wayne Duvenage, OUTA’s CEO.
OUTA has written to the minister of Public Enterprises, Pravin Gordhan as well as Treasury Director General, Mr Dondo Mogajane, the chairperson of the SAA Interim Board, Mr Geoffrey Qhena, and the Receivers of SAA, Siviwe Dongana and Bongani Nkasana, with a formal request and raising its concerns in this regard.
OUTA will be submitting its objection to SCOA this week, explaining why the diversion of the R2,7bn is unjustified and flawed in relation to SAA’s business rescue plan (BRP).
“The matter of recapitalising these three subsidiaries was not contemplated as part of the allocation of the R10,5bn allocation to SAA in the BRP, other than to make mention thereof after the implementation of the BRP,” Duvenage explains.
The Special Appropriations Bill purports to re-channel funds earmarked for SAA directly to the subsidiaries or via SAA, without the subsidiaries following due process as required under the Public Finance Management Act, No 1 of 1999.
Furthermore, OUTA is looking into the possibility of reckless trading by the executives and boards of these subsidiaries when it comes to their solvency and lack of filing for liquidation or business rescue over the past year or more. “One must ask if the boards of Mango and SAA Technical contemplated their respective organisations’ solvency and acted in the best interests of these companies, whilst they were making losses prior to and during the pandemic induced economic meltdown.”
Once again, OUTA calls on the State to stop wasting its limited resources in the bailout of non-core state owned enterprises (SOEs). “The country has much bigger issues to deal with, such as the fight against corruption. It is extremely frustrating for society to hear that budgets and funding for such important institutions as the National Prosecuting Authority (NPA) and the Special Investigations Unit (SIU) are being reduced, whilst failed non-essential SOEs are being allocated billions of rand to prop them up. This is simply not acceptable.”
A soundclip with comment from Wayne Duvenage is here.