The delay in the implementation of the Takatso Consortium 51% takeover of national carrier SAA was hampering the operations and future planning of the airline, SAA board chairperson Derek Hanekom and the Office of the Auditor-General told Parliament yesterday.
The Takatso takeover of SAA was approved by the Competition Tribunal in July, with conditions including that there be no retrenchments.
It is not clear from the Department of Public Enterprises and the Takatso Consortium on what is holding back the finalisation of the deal and investment of the earmarked R3 billion, more than two years after the transaction was announced.
This comes as the auditor-general presented SAA’s audit outcomes from 2018 to 2022, which indicated that billions of rand had been systematically siphoned from the carrier through all aspects of its procurement processes.
“On the cash flow side we are healthy. We do not need funds from the shareholder. We do not ask for further funding from the National Treasury, but it is the growth we have in mind that is being affected because we do not know when this R3bn is going to come in. We know the deal has passed all necessary approvals, including the Competition Tribunal, but were are not certain and the uncertainty is not a good thing," Hanekom told the standing committee on public accounts led by IFP MP Mkhuleko Hlengwa.
Hanekom said SAA, as an organisation in transit on a recovery journey, needed certainty and the bolstering of its finance department with skilled and qualified personnel. However, not many were willing to take on the job because the finalising of the Takatso Consortium deal would mean the incumbents would have to vacate their positions.
“Any investor or shareholder will want to bring in their own personnel on the finance side of things and that is what is affecting the recruitment that we need in the current state of the organisation,” he said.
Senior executives at the auditor-general’s office, Madidimalo Singo and Fhumulani Rabonda, said SAA, which currently flies a fleet of 13 aircraft, was financially viable.
However, the airline was riddled with uncertainties, including the tortoise pace in implementing its expansion plan and continued dependency on the government as the major shareholder for subventions.
Rabonda said: “The uncertainties with regard to finalisation of the SEP (special equity partner) transaction, when that will come into place, the impact it will have on the entity and also how much money will be available are some of the challenges SAA faces. This includes the challenges of repatriation of funds from entities SAA has flown in before. If that money could come it would help the entity a great deal.”
At the last count, Zimbabwe owed SAA R2.8bn and Nigeria about R1.1bn, which the auditor-general’s assessment indicated would be helpful to the organisation as it flexes its wings in new independence.
Rabonda also said plans that had been submitted by SAA subsidiaries Air Chefs, SAA Technical and Mango Airlines, which sought to operate independently of the main entity, were not coming to nought because of lack of funding and the dissolution of Mango, in particular.
He said neither Parliament, nor any other body, could use the SAA financials of the past four years for oversight as the figures were unreliable and contained material inconsistencies.
“SAA has historically been characterised by irregularities in the period from 2013 to 2018, which are not covered by the scope of our investigation. We liaise with the Special Investigating Unit because the outcome of their work has a bearing on audit outcomes. We had to issue a disclaimer audit outcome,“ Rabonda said.
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