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SIU seeks R3.4bn recovery for SAA losses in civil litigation

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The Special Investigating Unit (SIU) hopes to recover about R3.4 billion in civil litigations to recoup money lost by South African Airways (SAA) due to corruption and maladministration.

Updating the Standing Committee on Public Accounts regarding its investigation into corruption at SAA, SIU Head, Advocate Andy Mothibi says this projected amount can increase further if the pending investigations provide more findings during the course of the probe.

“We are making a summary there on slide 28 around the rand value of potential cash and the assets that need to be recovered. That’s at the top. This, at the time of this presentation, counts up to R3.4 billion. And that varies … unless you could have picked up during the investigation. But some of the losses are still continuing by the investigating teams. So that amount will probably spike as we quantify it. We will hand it over to the civil litigation team to ensure that processes are followed up.”

‘SAA needs equity partners’

Presenting its accounts in Parliament, SAA’s executive and some of its board members say it is turning the company around as part of its plan to attract potential equity partners.

SAA was not able to table its financial reports as it was insolvent, which led to it being placed under business rescue.

CEO Thomas Kgokolo says the current model of the organisation requires equity partners in order to be able to sustain its financial position in the long term.

“The structural future model of South African Airways is that SAA needs strategic equity partners. So we view ourselves as valorising the current SAA, preparing it for the shareholders. So that when the shareholders take any other decision there would be a life that SAA can be negotiated around.”

Takatso Consortium

SAA says the government’s delay in paving the way for the airline to get new equity partners is making it difficult for the entity to receive the much-needed financial injection.

Last year, Public Enterprises Minister Pravin Gordhan announced that Takatso Consortium as an equity partner was necessary and would acquire a 51% controlling stake in SAA. He said this was in order to be able to provide at least about R3 billion over a two-year period.

The airline’s interim board chairperson Derek Hanekom says the uncertainty has forced them to come up with a viable plan to restore financial sustainability.

“Part of the difficulty, Chairperson, has been the uncertainty about the share equity partner. So we do not know when is it going to happen. We know it’s on the card. We are called the interim board which is fine but we take full responsibility as the accounting authority whether we are called an interim or not. It does not really matter. But the problem is you know the uncertainty makes long-term planning a little bit difficult because along with the arrangements with the share equity partner will be the capital injection. But the question for us is do/can we plan on that R3 billion capital injection coming in?”

 

 

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