Planning, Monitoring and Evaluation Minister Maropene Ramokgopa clarified that the term of office for the current board expired on December 31. Picture: Itumeleng English /Independent Newspapers
Planning, Monitoring and Evaluation Minister Maropene Ramokgopa has defended the recruitment of the executive management the South African Airways before the end of the term of the previous administration.
This follows a written parliamentary reply by Ramokgopa when she was quizzed by EFF MP Omphile Maotwe on the executive management positions the SAA advertised in April.
Maotwe asked about the validity of the advertisement when former public enterprises minister Pravin Gordhan was at the helm of the now disbanded department as the appointment of the SAA board by the Cabinet was on an interim basis.
She also wanted to know when Ramokgopa intended appointing a permanent SAA board and measures that have been put in place to facilitate and expedite the appointment of a permanent board instead.
In her reply, Ramokgopa said the board was responsible for the recruitment and selection of SAA executives, particularly the CEO and the CFO.
This was provided for in the SAA’s Memorandum of Incorporation.
“This recruitment process remains valid even though the SAA board was appointed on an interim basis.”
She said there was no distinction between the interim and permanent board.
“The Companies Act 71 of 2008 does not distinguish between interim and permanent directors. Section 1 of the Companies Act defines a ‘director’ as a member of the board of a company, as contemplated in section 66, or an alternate director of a company, and includes any person, regardless of their title.”
Ramokgopa clarified that the term of office for the current board expired on December 31.
“The process of appointing a permanent board will be completed before the expiration of the current board’s term,” she said.
The minister also said the stabilisation of the boards of the state-owned companies within the department's portfolio was one of the top priorities for the seventh administration.
“The appointment of new permanent boards, including that of SAA, will ensure leadership stability and effective governance.”
DA MP Darren Bergman said the department told the portfolio committee’s orientation workshop on Wednesday that they were working towards the appointment of the permanent board for SAA.
“They said they are working toward the appointment. They have not announced a definite plan,” Bergman said.
The workshop had raised questions around the finances of SAA when it presented its strategies and how it hoped to achieve them during the 2024-25 financial year.
The interim board is currently led by former minister Derek Hanekom.
“It is important to have a permanent board for continuity and sustainability. If people have done a good job, they should be appointed. If there is any concern around the delivery of what they presented as a strategy, they must give way for other people.
“There has to be a definite appointment. We have seen what delinquent directors can do. What we want is to create stability and security,” Bergman said.
Meanwhile, Ramokgopa said the now-cancelled Takatso transaction deal was the best option in reviving the SAA.
Maotwe asked whether the minister found the deal was the best to revive the public airline considering it has proven itself to be profitable without a strategic equity partner.
Ramokgopa said the Cabinet decided in November 2019 that SAA needed to be restructured, and a strategic equity partner should be sought.
At the time the government did not have cash in hand.
“It needed R4.1 billion in bridging finance to support the working capital of SAA until the end of the 2019 financial year,” she said.
“It approached a number of the major financial institutions for assistance. However, these financial institutions were unwilling to extend further credit to SAA.”
Ramokgopa said when the public airline was placed under business rescue in December 2019, the government undertook a process to seek an SEP for SAA.
“The Takatso transaction deal was the best option in reviving SAA because it would have given the airline the required capital injection for its expansion. Furthermore, the deal would guarantee SAA’s future’s sustainability as the government would not be expected to inject capital into SAA for operations,” she said.
“As the Takatso transaction was terminated by mutual consent, SAA would need to raise debt funding which requires interest to be paid whether the airline makes a profit or loss in any particular year,” Ramokgopa added.
Cape Times
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