Myeni to be grilled at Parliament’s finance meeting

African News Agency (ANA)

Myeni to be grilled at Parliament’s finance meeting

The Democratic Alliance will attempt to get to the bottom of the myriad issues plaguing South African Airways (SAA) at the scheduled appearance of the SAA board and executive before Parliament’s finance standing committee on Tuesday.

The 2014/15 SAA annual financial statements tabled late on September 15, even though preliminary and a year overdue, reveal the extent to which SAA has been mismanaged, DA spokesman Alf Lees said on Sunday.

According to Finance Minister Pravin Gordhan, the finalisation of the 2014/15 report had been delayed because “a number of technical difficulties were raised by the auditors at the last minute”. Consequently the report tabled did not include the auditors report, nor had it been signed off by the board and could be subject to “material changes”, Lees said.

“It is disconcerting that some 18 months after the end of the financial year and some 12 months after the due date for the report, the auditors only now raise ‘technical difficulties’. We suspect that the auditors will be looking at the anti-competitive claims lodged by Nationwide and Comair airlines that are likely to cost SAA more than R1.1 billion and have not been adequately provided for. These would increase the losses of R4.67 billion to some R6 billion or more.”

The report highlighted just how dire the financial situation at SAA was, whereby it stated that the “shareholder has approved a further perpetual guarantee to ensure that SAA remains solvent and has access to sufficient working capital to continue operating as a going concern”. This clearly demonstrated the heavy reliance on the government backed guarantees.

The report revealed serious management issues, including:

  • a massive loss of R4.67 billion for the year, bringing the losses for the three year period to R8.67 billion;
  • irregular expenditure went up to R68.5 million, an increase of 241 percent;
  • fruitless and wasteful expenditure amounted to R52.7 million, an increase of 275 percent;
  • losses in subsidiaries amounted to R214 million, an increase of 62.1 percent; and
  • R224 million worth of aircraft spares were written off as obsolete.

“In order to get to the bottom of the issues identified in the report, the DA will relentlessly interrogate [SAA board chairwoman] Miss [Dudu] Myeni and other executives,” Lees said.

Some of the questions needing answers were what was SAA’s operational plan to avoid further government guarantees? when SAA would be able to release the government from the R19 billion government guarantees given to SAA? whether or not Myeni would agree to cease to act as both board chair as well as de facto CEO as instructed by Gordhan? and what bodyguard services Myeni enjoyed at SAA expense?

“The DA looks forward to receiving full and comprehensive answers when the committee meets with Dudu Myeni, the deputy minister, and the National Treasury director general on Tuesday in Parliament,” Lees said.

South Africa Today – South Africa News

SOURCEAfrican News Agency (ANA)