State-owned regional airline SA Express has reacted strongly to the ruling by the Johannesburg High Court on Thursday that it be placed in business rescue. The airline stated in a press release on Friday that it was seeking further legal advice on the matter. The company headed its release “SA Express slams Business Rescue judgement as unsatisfactory”.
(A service provider to SA Express, Ziegler SA, brought the application to the court to place the airline under business rescue. SA Express reportedly owes Ziegler R11.3-million and the airline is also reportedly technically insolvent.)
“The review of the judgement by SA Express’ lawyers indicates that the court exceeded what was required and granted orders not sought by the applicant,” stated the airline in its press release. “The court has also not made any order on whether the matter was urgent or not, in circumstances when the urgency was specifically opposed.”
In its statement, the airline affirmed that it had “disputes with the supplier” and that its board had been, in an orderly manner, “dealing with the malfeasance”. SA Express further noted that it had been “plagued” by suppliers who had overcharged it and applied unfair pricing. These suppliers were now under internal review by the airline.
“The airline states that it would be irresponsible and amount to wasteful and fruitless expenditure to make payment on invoices submitted by Ziegler in circumstances where it was aware of irregularities,” it asserted. “It would be absolutely criminal to allow further misuse of taxpayers’ money to reward a company whose contract has been identified, through forensic investigations, as irregular and in contravention of [the] PFMA [Public Finance Management Act].”
SA Express further averred that “tens of invoices” that had been authorised by the airline’s previous management had been found to contain discrepancies. “[I]t is on this, among a number of other issues, that the airline will appeal.”