Unions want to ask ConCourt to order Parliament debate on saving SA Express

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The Zondo Commission has in the past heard testimony about mismanagement at SAX.
The Zondo Commission has in the past heard testimony about mismanagement at SAX.
Gallo Images/Grant Duncan-Smith
  • SA Express (SAX) was placed under provisional liquidation in April 2020 after its business rescue process failed.
  • On Thursday the return date to determine if the state-owned regional airline has to be placed in liquidation, was again postponed.
  • Two unions want to get the Constitutional Court to prevent the demise of SAX, while a previous preferred bidder has submitted a revised offer.

The National Union of Metalworkers of SA (NUMSA) and the SA Cabin Crew Association (SACCA) intend asking the Constitutional Court to compel the National Assembly to debate  whether state-owned regional airline SA Express (SAX) should be permitted to go insolvent.

The two unions contend that, in the absence of Parliamentary oversight, a state-owned company cannot be finally liquidated by a court.

SAX was placed under provisional liquidation in April 2020 after its business rescue process failed. In January this year, the return date to determine if SAX has to be placed in liquidation was again postponed - until Thursday 29 April. The aim was to provide more time to try to save the airline.

On Thursday the matter was postponed to 28 July.

In an urgent letter, which formed part of the court documents presented on Thursday, attorney Minnaar Niehaus, acting on behalf of members of members of NUMSA and SACCA who are employees and creditors of SAX, asks for a further extension of the return date of the SAX liquidation application.

He argues that, while NUMSA and SACCA's intended Constitutional Court case is pending, it would not be in the interests of justice for the High Court finally to liquidate SAX. The letter states that Denel will also be made a respondent in the case.

"In the event that NUMSA is successful in the Constitutional Court, the possibility will arise that the Ministers of Public Enterprises and Finance, respectively, who are presently not opposing the liquidation of SAX, might be persuaded to recapitalise SAX, alternatively to spearhead interactions with potential equity partners," states the letter. 

"The Constitutional Court may compel Parliament to hold the ministers to account for their failure to recapitalise SAX. That presents the prospect that SAX could be saved and would prevent the granting of a final liquidation order."   

Earlier in April this year, the provisional liquidators of SAX said they are still waiting for "a realistic buyer" of the state-owned regional airline. They claimed they have only received "opportunistic claims, none of which have materialised, and no bidder has been able to provide proof of funding". 

This includes an offer by Fly SAX, which had been accepted as preferred bidder last year. Fly SAX is an equity crowdsourcing proposal by a group backed by some employees.

Theunis Crous, CEO of Fly Modern Ark, claims they have made numerous offers to the liquidators. According to its website, Fly Modern Ark specialises in aircraft leasing and sales. However, Aviwe Ntandazo Ndyamara, on behalf of the provisional liquidators denied Crous' claims.

The Zondo Commission has in the past heard testimony about mismanagement at SAX.

In a confidential letter dated 20 April 2021 addressed to the provisional liquidators on behalf of Fly SAX and seen by Fin24, SA Express is described as "playing a fundamental role in providing an integrated air transport service to viable, domestic and regional markets, utilising profit driven principles".

Fly SAX submitted a revised offer to acquire the business of SAX as a going concern subject to certain terms and conditions.

"The philosophy behind the Acquiring Entity is to create a 'people's airline' in which the public can invest and participate," states the letter.

Fly SAX, therefore, also asked for the court to postpone the case for three months so that its revised offer can be considered.

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