Cape Town – Finance Minister Pravin Gordhan said a “good announcement” regarding South African Airways (SAA) can be expected “shortly” on Wednesday evening.
The minister, who heads up the state-owned company, is withholding a R5bn guarantee as a carrot for the ailing national carrier to reform.
Because SAA is refusing to budge, it is preventing itself from filing year-long overdue annual financial statements as this guarantee is required.
The main reason SAA is refusing to budge is that Gordhan is seeking a new board, and allegedly the dumping of President Jacob Zuma’s pal, SAA chairperson Dudu Myeni.
Myeni has overseen the financial demise of the airline, with SAA seeing countless CEOs come and go during her tenure. She has also seen a few ministers pack their bags.
Now, Gordhan’s efforts to reform state-owned companies like SAA, Eskom and Denel are being complicated by the Hawks' threat of arrest over an investigation unit established at the South African Revenue Service (Sars) when he was commissioner from 1999 to 2009. The Hawks are trying to pin corruption charges on Gordhan regarding the retirement plan of former Sars head Ivan Pillay.
His reforms are crucial to keeping South Africa out of junk credit status. In addition, the three rating agencies warned government not to meddle with the Finance Ministry. This message has perhaps fallen on deaf ears.
During a debate with Justice Malala in Cape Town on Wednesday, Gordhan replied to the political commentator’s jab at SAA: “Until now I was enjoying my evening and then he brings up SAA.
“So, let me give you the diplomatic statement: we are working on it Justice,” he said. “But at least you know the kind of difficulties we have, but we are hoping we can make a good announcement shortly.”
WATCH: Gordhan reveals SAA move
This comes amid the resignation of the chair of SAA’s audit and risk committee - one of only three remaining non-executive directors - because the airline seems destined for liquidation.
City Press reported on Wednesday that chartered accountant Yakhe Kwinana – a member of the SAA board since 2009 – sent a letter announcing her departure to both Gordhan and Myeni on Monday.
In it, she said that “it has come to a stage where I had to weigh the risks of staying”.
If SAA were liquidated with her as a director it could disqualify her from the boards of her own companies, she told City Press by phone.
“The bottom line is that my reputation is at stake. My professional certification is at stake.”
Her resignation could also help resolve the impasse that seemed set to drive the national carrier into the ground.
According to Kwinana, her resignation would leave the board dysfunctional.
The SAA memorandum of incorporation called for five board members, the majority of which needed to be non-executives. After Kwinana’s resignation, there were only four board members left, of which only two were non-executive, she said.
Kwinana admitted that the Companies Act could technically override this problem with its more minimal requirement of three board members, but that breaking SAA’s own rules of incorporation would force Gordhan to appoint new blood.
“It is his prerogative to appoint a new board. The minister has not done what is expected, maybe other forces are hindering him,” said Kwinana.
HOW THE GORDHAN/HAWKS STORY UNFOLDED:Hawks summon Pravin Gordhan - report
Rand plunges on report Hawks circling Gordhan
SA assets sink after Hawks summon Gordhan
Gordhan may have to throw in the towel – analyst
JSE financials reel as Gordhan probe escalates
FULL STATEMENT: Why Gordhan won't meet the Hawks
Open letter to President Jacob Zuma: Hands off Gordhan
Rand takes beating as Gordhan drama deepens
Gordhan battle: SA staring down edge of economic abyss
Malema: No reason to panic, Gordhan not guilty
Gordhan speaks out on patronage, corruption
Gordhan exit will make junk status inevitable - actuarial scientist
Read Fin24's top stories trending on Twitter:
Fin24’s top stories