SAA’s late financials finally land
SAA’s long-overdue 2014/15 annual financial statements have finally landed in Parliament, on the eve of a crunch meeting between Deputy President Cyril Ramaphosa, Finance Minister Pravin Gordhan and ratings agency Moody’s. Efforts to bolster governance of key parastatals will be a burning issue at the meeting next week, after the ratings agency placed five of them on review for a downgrade.
SAA’s financial statements – still in preliminary form, pending resolution of “technical issues” raised by the auditors – were tabled only after Gordhan had granted a new R4.7bn government loan guarantee, without which, he confirmed on Tuesday, it would have been technically insolvent.
This comes after the airline posted a R4.7bn loss in 2014/15 and, as Gordhan confirmed, another R1.6bn in 2015/16.
Though SAA was not included in the Moody’s list of “most sensitive” state-owned enterprises placed on review, nor among those hit by an earlier funding freeze by money manager Futuregrowth, the government’s almost half-a-trillion rand in government loan guarantees to parastatals is seen as a key risk to its sovereign credit rating.
SAA has now racked up just shy of R20bn in loan guarantees on its own.
The return of Dudu Myeni to the helm of the SAA board, against Gordhan’s wishes, is seen as an indication that Gordhan doesn’t have the full backing of President Jacob Zuma.
Gordhan has struggled to assert his authority over Eskom and Denel, both of which have had run-ins with the Treasury amid allegations of Gupta-related tenders. His row with Sars boss Tom Moyane took a new turn when Moyane, having been accused of dragging his feet over a report implicating his second-in-command in dubious deposits into his bank account, laid the blame for his delayed action at the door of the Financial Intelligence Centre (FIC), which reports to Gordhan.
Announcing the appointment of two executives to replace Jonas Makwakwa (alleged to have received R1.2m in “suspicious and unusual” deposits) Moyane blamed the FIC’s “lack of co-operation”. Tensions between the two have simmered ever since Gordhan’s return to the finance ministry, as Moyane refused to halt a restructuring of the service and filed a complaint with the Hawks over an alleged “rogue” intelligence unit during Gordhan’s term as Sars commissioner.
In their book Rogue: The Inside Story of Sars’ Elite Crime-Busting Unit, former Sars group executive Johann van Loggerenberg and former Sars spokesman Adrian Lackay identify “the dark forces at play in politics and the business world”, Exclusive Books’ Benjamin Trisk said. It “presents an alarming picture of how a national institution has failed the country… (and) shines an unnerving light on intelligence structures that are used to serve individual or factional interests”.