South African Airways (SAA) would face immediate liquidation if its financial statements were to be made public. That’s according to Public Enterprises Minister Pravin Gordhan who says the move to keep the records away from the public eye, prevented massive job losses.
The Minister was briefing a joint meeting of the Standing Committee on Public Accounts and the Portfolio Committee on Public Enterprises.
He was justifying why SAA has still not submitted annual reports to parliament for the past two financial years, as required by law. The struggling national carrier is under voluntary business rescue. It’s been two years of going back and forth between parliament and SAA.
SAA has been hiding the real state of the financial situation from parliament. But it could no longer hide when the airline was placed under business rescue.
Government is now seeking a legal opinion on whether it’s forced to submit the financials.
Pravin Gordhan says: “Liquidation would mean immediate grounding of airplanes, staff being let go and creditors lining up. We will get a legal opinion on providing financial information instead of financial statements.”
Public Accounts (Scopa) Chairperson Mkhuleko Hlengwa says: “Minister on the legal advice SAA said they have it, we asked for it but they never submitted it. But it must be clear that the committee is not in agreement with prolonged non-submission of financials.”
Members of Parliament (MPs) also questioned the mandate and time frames for the business rescue exercise. But they assured they’re not trying to push for SAA to be liquidated.
The business rescue practitioners have been given three months to give a detailed report in April.
They’re also expected to give possible solutions on the way forward for SAA.