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SAA Financials MIA as 51% of share sale details to Takatso…

SAA still owes lawmakers at least four years of audited annual financial statements, and these should be available for public scrutiny and scrutiny, regardless of SAA’s 51% sale deal, the Parliament’s public spending watchdog, the Standing Committee on Public Accounts (SCOPA) heard on Wednesday.

SAA’s 2017/18 fiscal year audit was delayed from board-approved financial statements and then suspended at the board’s request, given the nation’s precarious airliner’s finances, which in December 2019 was put in business rescue.

When SAA stopped saving business from April 30, 2021, the Office of the Auditor General made contact to audit the finances. In February 2022, the 2017/18 audit concluded with a qualified audit opinion – including uncertainty as to whether SAA was still in operation and a disclaimer for Mango Airlines.

Then nothing.

“We are busy engaging SAA along with other stakeholders to commence the remaining audits for fiscal years 2018/19, 2019/20, 2020/21 and 2021/22,” according to the Office of the Auditor General presentation. at Scopa.

SAA remains a public asset until control is transferred as part of the deal to sell 51% of the national airliner to the Takatso Consortium, which Public Enterprises Minister Pravin Gordhan announcement as a strategic partner in June 2021, with the sale agreement finally approved by the Cabinet on February 23, 2022.

Or as Fhumulani Rabonda, National Audit Manager of the Office of the Auditor General put it: “During the period when SAA was…a public entity, it still has to account for these government funds and assets. For all years up to the date that there is a legal transfer of control…they have to do financial statements…and Parliament will have a role to play.

How oversight is carried out after the transfer of majority control will depend on the agreement between the Ministry of Public Enterprises, which represented the government’s 49% stake in SAA, and the new shareholders of the national airliner.

But it’s still a point of discussion and engagement – just like the view of the sales agreement. The Office of the Auditor General remains in the dark about this sales contract, as do the legislators.

“We hope we will get it in due time. There’s no reason we can’t get the deal. This is part of ongoing commitments,” the head of the business unit of the Office of the Auditor General, Zolisa Zwakala, said on Wednesday.

DA MP Alf Lees had unsuccessfully applied for the deal earlier in 2022 under the Promoting Access to Information Act. The SAA sales agreement request was rejected.

On Tuesday, Scopa had scheduled a briefing on SAA. Its previous meeting in early March 2022 prompted an avalanche of letters, signaling tensions within the government, as Public Enterprises Minister Pravin Gordhan appeared to disagree with National Treasury Director General Dondo Mogajane’s statement that the Treasury had “no role in the process of selecting strategic capital”. partner…”

However, from Gordhan’s letter dated April 7, 2022, it appears that the sale agreement is subject to conditions such as regulatory approval and “the government providing the balance of the R14 billion, or 3.5 billion rand to SAA to complete the rescue of the company’s implementation plan.

Since the deal was announced in 2021, it has been common knowledge that the Takatso consortium has pledged to provide R3 billion to the national airline.

Speculation is rife that money was the reason for the delay in finalizing the deal since it was initially announced in June 2021.

The evidence proves a Gupta scheme to capture Eskom, secure the suspension of the four leaders under cover of an investigation into Eskom’s affairs, install officials selected by the Guptas in positions of influence within Eskom at the place of the four suspended leaders. leaders and then divert Eskom assets for the financial benefit of the Guptas.

The 2020 Medium-term fiscal policy statement (MTBPS) made available R10.5 billion – as requested by business rescue practitioners, but less than the R14 billion requested by the Department of Public Enterprises to also include SAA subsidiaries. It then became confusing whether a R2.7 billion allocation for SAA subsidiaries in 2021 was new money or came from the R10.5 billion allocation.

The reference to R3.5 billion in Gordhan’s letter to Scopa appears to be a reference to the insufficient 2020 MTBPS allocation when SAA got R10.5 billion of the R14 billion the Ministry of Public Enterprises had asked.

This MTBPS 2020 was the latest SAA bailout, or as the government prefers, the capital injection for SAA. This contrasts with 2017 where, between June and September, R5.2 billion was withdrawn from the national purse so that SAA could repay loans which became due and could not be renegotiated by the national airliner, whose board of directors was then chaired by Dudu Myeni.

A warrant for Myeni’s arrest was issued on Wednesday but was suspended after his lawyers cited “ill health” for his failure to appear in court for frustrating or obstructing the administration of justice, according to the National Prosecutor’s Office. These charges related to her naming a protected witness while at the helm of the State Capture Commission.

In January 2022, the commission’s report concluded: “[Myeni] proceeded, through a mixture of negligence, incompetence and willful corrupt intent, to dismantle SAA’s governance procedures, create an atmosphere of fear and intimidation and a series of operational choices to SAA who saw it decline into a chaotic state.

The SAA is caught up in the ideological fractures of the ruling ANC, perhaps as a vanity project. In January 2020, the ANC’s National Executive Committee decided: “SAA should be retained as the national airline, which will require substantial restructuring.”

As strained public funds could not support a domestic airliner which between then and 2017 had received 15.7 billion rand bailoutsthe compromise was to sell 51% of SAA, a decision that had been stalled for years.

While SAA remains mired in obliquity over a host of issues, not the least of which is funding, Eskom is taking many steps to emerge from state capture, such as recovering money improperly paid to consultants like Trillian and internal processes that, no matter how slow, have resulted in criminal prosecutions.

But, as the rotating power cuts hit everyone, it is Eskom who is in the spotlight in Parliament – during Thursday’s discussion and Wednesday’s Q&A with ministers economy.

Gordhan dismissed DA MP Ghaleb Cachalia’s question on whether a national state of disaster would be declared around Eskom’s rotating blackouts, saying state capture had contributed to Eskom’s poor performance – and that an additional 4,000 MW to 6,000 MW was needed for the network.

“Evidence proves a Gupta scheme to capture Eskom, obtain the suspension of the four leaders under cover of an investigation into Eskom’s affairs, install officials selected by the Guptas in positions of influence within Eskom in instead of the four suspended the executives and then diverted Eskom assets to the financial advantage of the Guptas,” Gordhan quoted from the State Capture Commission report.

What this response cleverly avoided was tension with Gordhan’s Cabinet colleague, Mineral Resources and Energy Minister Gwede Mantashe, whose portfolio deals with independent power producers who could bring online much-needed energy through wind, solar and other projects.

Irrespective of tensions within the Cabinet and the executive, oversight of state-owned enterprises is crucial for a government that proclaims its commitment to fighting and ending corruption. This is not something the executive can be left to do alone – as the State Capture Commission report shows.

And with the next and final installment of the committee, which will also deal with parliamentary scrutiny, it would seem timely for parliament to step up. Instead, ANC benches tell others not to yell.

That SAA was not on the agenda for Wednesday’s Ministerial Economy Q&A is astonishing. That to date audited financial statements for four years and more have not been tabled in Parliament as required by law is astonishing. That the Auditor General has to “engage” with the SAA and “other stakeholders” before he can begin statutory and constitutional audits is amazing.

These are signs that the patterns and trends established in the state capture years are persisting. DM