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DA: Do not back SAA rescue plan

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SAA

‘It is common cause that SAA has been mismanaged for a decade or more. The entity has been insolvent and bankrupt for all practical purposes for at least the past five years.’

Do not vote for the SAA Business Rescue Plan – that’s the plea from Democratic Alliance (DA) member of the standing committee on public accounts Alf Lees and DA shadow minister of public enterprises Ghaleb Cachalia.

Lees stated in an open letter yesterday that the business plan proposed by SAA business rescue practitioners Les Matuson and Siviwe Dongwana raised “a number of moral, ethical and financial issues in general, but particularly with regard to the situation faced by SAA in view of the challenges faced by the country as a result of the demands made by Covid-19”.

“It is common cause that SAA has been mismanaged for a decade or more. The entity has been insolvent and bankrupt for all practical purposes for at least the past five years and has only achieved going concern status year after year on the back of R36.9 billion in taxpayer cash bailouts together with government guarantees of R19.1 billion,” the two said.

“The question creditors and lenders should be addressing is whether it is proper – morally, ethically and in terms of understood risk – to divert funds desperately needed to fight the coronavirus, rampant hunger and associated job losses to compensate for the folly of recklessly doing business.

“Accordingly, we urge you to vote against the proposed business rescue plan on 14 July.” The two said the funds were desperately needed to to stimulate an economy decimated by Covid-19 lockdown.

Last week, the department of public enterprises welcomed the revised SAA business rescue plan and urged creditors, employees and stakeholders to vote in favour of the plan tomorrow.

Seventy-five percent of associated parties would have to vote in favour of the business rescue plan to carry the vote. “In supporting the plan, the government is committed to mobilise the necessary resources to fund the transition.

“This includes the severance packages, which meet the minimum requirements of the Labour Relations Act, and the incentivisation of those employees at the lower rung of the remuneration scale to ensure that they are compensated,” the department of public enterprises had said.

-The Citizen

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