SAA memo: What they didn't want you to know
The South Gauteng High Court on Thursday dismissed South African Airways’ (SAA's) urgent application to get an interdict prohibiting Media24, Business Day and Moneyweb from publishing a secret internal memorandum.
This now allows the media to publish the memorandum.
SAA boss Dudu Myeni didn’t want the South African public to know that SAA was "insolvent" and that they are described as "reckless" in the memorandum.
The main aspect addressed in the memorandum is the deal SAA made with manufacturer Airbus with regards to new aircrafts, which SAA is not able to pay for as agreed in the purchase agreement.
SAA and Airbus concluded a purchase agreement in 2002, where they initially wanted to buy 15 A320-200 aircrafts.
During 2007-2008, the purchase agreement was amended to include an extra five A320-200 aircrafts, thus bringing the total to 20, and to add the leasing of other aircraft types.
Some of the important points mentioned in the memorandum include the following:
The former CFO Wolf Meyer said that it would not be possible for SAA to complete their Airbus transaction and pay all of their creditors.
"The CFO has advised that SAA will be unable to pay its debts as and when they become due, should SAA pay the predetermined payment. SAA does not have money to pay both."
Meyer has since resigned.
Further, the memorandum states that SAA is trading under insolvent circumstances.
"Based on a reliance on a going concern and the inability of the auditors to sign off on the annual financial statements, SAA has been and remains technically insolvent. Accordingly, SAA is financially distressed and trading under insolvent circumstances.”
It is also stated that Myeni’s decision to continue with the Airbus-transaction worsens SAA’s already weak financial position.
According to the Companies Act, the board "is required to file for business rescue and liquidations".
Alternatively, creditors or employees may apply to court to place SAA under business rescue.
Should Myeni and the council not comply with the Companies Act, it can result in "statutory sanctions and a possible fine or imprisonment against a person found guilty of an offence to defraud a creditor, employee or shareholder".
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation