Publications
Partners
A last-minute intervention by Public Enterprises Minister Pravin Gordhan has put the brakes on a court application to place SAA under business rescue.
City Press’ sister publication, Rapport, has established that Gordhan met with trade union Solidarity to request that the union halt its intended court application.
It appears that Gordhan and the union have agreed to come up with a plan to keep the national carrier flying high rather than grounded.
The ministerial intervention came after talks between Solidarity and the SAA board had stalled.
These discussions happened between August 1 and 7, when the union’s representatives met with the entire SAA board to discuss the union’s arguments and plans for going ahead with the application.
However, these talks stalled, and Solidarity informed SAA’s legal representatives that it planned to issue the application for business rescue on August 21.
But two days before, on August 19, Gordhan is understood to have called Solidarity’s chairperson, Flip Buys, and asked for a meeting.
At about 2.40pm on the same day, the minister, accompanied by top officials, met with Buys, as well as with Solidarity’s managing director, Dirk Hermann, and the union’s attorney, Werner Human, at the department of public enterprise’s offices in Pretoria.
Gordhan wanted to hear what the union’s plans were and whether there was an alternative to business rescue.
The following week, on August 26, a second urgent conference was held. At this meeting, both parties agreed to finalise a document with concrete steps to turn SAA around.
According to Connie Mulder, head of the union’s research institute, Gordhan said he wanted an “inclusive process” involving other trade unions which represent SAA employees.
“Solidarity is not opposed to this, but we do not want to be dragged into a process that results in talks. We want to see action,” said Mulder.
Gordhan’s spokesperson, Richard Mantu, would not confirm or deny any of the processes undertaken.
SAA’s spokesperson, Tlali Tlali, acknowledged receipt of Rapport’s questions, but had not reacted to them at the time of going to press.
Solidarity announced as early as April last year that it would bring an application for business rescue – because SAA was “technically insolvent” and because Solidarity qualifies as an affected party in terms of the Companies Act, meaning it can bring such an application.
At the time, Human said “nobody has yet resorted to this step”, but that it was “in the interest of our members and of the public, especially taxpayers”.
The trade union’s plans were put on ice in June last year, after former SAA chief executive Vuyani Jarana announced plans to save SAA and undertook to begin an immediate process of finding a private sector partner which would be willing to buy a minority stake in the airline.
That never happened and Jarana resigned earlier this year, in May. In his resignation letter, which was leaked to the media, he said that the continuous burden of attempting to coordinate between management, the board, the department of public enterprises and National Treasury had made his job impossible.
He said that SAA’s turnaround plan was “systematically undermined” to such an extent that he was no longer certain if it would be possible to implement it.
It was after Jarana’s resignation letter that Solidarity decided to go ahead with its business rescue plans.
Hermann said the business rescue process around SAA was a breakthrough for tax activism.
“The plans to bring a business rescue application, and the negotiations that followed, are a first for South Africa. Civil society and the state are arm-wrestling in an orderly manner over public enterprises that are funded by the taxpayer.
“Taxpayers do not have to sit back and watch their tax money being wasted. South Africa has to develop a culture of tax activism, so that accountability can be demanded for the way our money is spent.
“We are not just taking action at SAA on behalf of hundreds of our members who work there and the thousands who work at other state-owned enterprises (SOEs), but also on behalf of tens of thousands of members who work hard every day and pay taxes,” he said.
If a business rescue application at SAA were to succeed, it could lead to a string of similar applications against other SOEs.
This would be a major embarrassment for government and could lead to the state losing control of key entities such as the SABC and Eskom.
