SAA asks for another extension to submit financial statements
South African Airways (SAA) has asked Parliament to grant it a second extension to finalise its annual financial statements, which were due to be tabled by 30 September.
NJR ZA via Wikimedia Commons
The company has been unable to finalise its accounts for 2014-15 as it requires a further government guarantee of about R5bn in order to be classified as a going concern. The Treasury said on Tuesday that it could not comment on whether the guarantee would be forthcoming. It is expected, though, that the matter will arise during the tabling on the budget on February 24.
Failure to meet deadlines
Last year, chairman of parliament's Portfolio Committee on Finance, Yunus Carrim, reprimanded SAA chairwoman Dudu Myeni for failing to table SAA's annual financial statements and annual report by the deadline demanded by the Public Finance Management Act. He set a new deadline of January 15 for the submission. This was extended by a month at SAA's request, and now a second extension has been granted.
SAA's board
As a result of the delay, SAA has also not held its annual general meeting (AGM) for 2015. It is expected that when the AGM is finally held, Finance Minister Pravin Gordhan will appoint a new board.
SAA has had an interim board of only four nonexecutive members since December 2014. Following the resignation of Tony Dixon last October the board has been left with only three non-executive directors, and an acting CEO and acting chief financial officer on the board.
There is constant speculation about whether Myeni, a close friend of President Jacob Zuma, who has violated corporate governance norms, will be reappointed. But this is unlikely as Myeni has already served three terms on the board. The company's memorandum of incorporation limits directors to three terms. Myeni's close associate Yakhe Kwinana has, however, only served two terms.
While Gordhan has promised that he is dealing with the matter of the SAA board and will make an announcement soon, this is not expected to happen before next week's budget.
Although Gordhan is the member of executive that oversees SAA and, therefore, has the authority to appoint the board with the sanction of the Cabinet, in reality, board appointments to state-owned enterprises have become politically fraught and involve a great deal of horse-trading among various members of the Cabinet, including the president, as well as the African National Congress.
Source: BDpro
Source: I-Net Bridge
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