Public Enterprises Minister Malusi Gigaba has warned the incoming board at troubled State-owned airliner SA Express (SAX) that he will be watching its performance with “eagle eyes” as it moves to reverse the reputational damage that has occurred as a result of the failure to produce financial statements for 2011/12, as well as the withdrawal of the 2010/11 statements, owing to irregularities.
More “hands-on” oversight was required from the new nonexecutive directors, who would be led by Andile Mabizela, who succeeded Lilian Boyle as the group’s chairperson.
The CEO remained Inati Ntshanga, who was appointed in late 2010.
Speaking at the group’s annual general meeting (AGM), which took place at Airways Park, in Ekurhuleni, on Monday, Gigaba lamented the “drastic decline” in the domestic and regional carrier’s “performance, brand and reputation, management and internal controls”.
“This was aggravated by the withdrawal of the 2010/11 financial statements, which raised questions as to the competence of all the parties associated with the management of the company. This casts doubt as to the application of appropriate accounting treatments for the previous years.”
Only Dr Bridget Ssamula was re-elected to the new board, which also comprised of Ezrom Mabyana, Karabo Tshailane-Nondumo, Neo Priscilla Moshimane, Shumani Tshifularo, Nosipho Gxumisa, George Mothemba and Noni Dibate.
The external auditors, Nkonki, were also not reappointed and the Auditor General had been requested to take over the audit function.
SAX’s failure to present audited financial statement at the AGM was dubbed “irregular” and had been associated with an adverse opinion from Nkonki.
“The relationship between all parties has deteriorated to such an extent that it was prudent for the shareholder to engage both parties to address the impasse that found itself in the public domain,” Gigaba said.
The Auditor General would initially deal with the outstanding 2011/12 financial statements and Gigaba promised to communicate the outcome to the public and to Parliament.
The appointment of a permanent CFO was also highlighted as a key priority for the incoming board, as was the fostering of a “holistic and unified” aviation strategy that did not contradict the objectives of government or that of the national carrier, South African Airways (SAA).
“The new board is required to engage with SAA and the department to ensure that the current trend of misalignment of the overall strategic intent of both these entities is resolved,” Gigaba, who highlighted as a challenge the current franchise agreement between SAA and privately owned SA Airlink, said.
“Being mindful of competition laws, it is important that SAA and SA Express agree to embark on a process of continuous cooperative scheduling of their scheduled services, cooperative route development and mutual support to the enhancement of shareholder value.”
Edited by: Creamer Media Reporter
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