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Cape Town - If speculation that Cabinet has decided to retain Dudu Myeni as chair of the board of South African Airways (SAA) turns out to be true, it would be "a massive political defeat" for Finance Minister Pravin Gordhan, Alf Lees, the DA's deputy shadow minister of finance, said in a statement.
Business Day reported on Thursday that Gordhan had allegedly failed to get President Jacob Zuma's approval for a board without Myeni at its helm. She also chairs the Jacob Zuma Foundation.
"Her re-appointment would be bad for SAA, bad for our economy and bad for Pravin Gordhan," said Lees.
In response to questions posed by Fin24 regarding the reported rumours about Myeni being kept as chair, National Treasury responded that it "cannot comment on the matter of SAA prior conclusion of the Cabinet processes".
A government spokesperson told Fin24 on Thursday afternoon that an announcement on the SAA board would be released on Thursday evening or on Friday.
In the view of Lees, keeping Myeni at the helm would be negative for the SA economy and the upcoming ratings assessments. He said international agencies are looking closely at how state-owned enterprises (SOEs) are managed and, if Myeni is retained, it will "make a sovereign downgrade even more likely".
According to Lees, Myeni and her board have "recklessly continued to run SAA into the ground and to the brink of liquidation".
READ: Myeni set to win SAA battle and remain board chair - report
'Lack of reform'
It has been alleged that, because of a lack of reform at SAA, Treasury, which is its representative shareholder, is withholding a R5bn guarantee the airline desperately needs.
SAA, for instance, ran the risk of having its flights to Hong Kong cancelled on September 6, due to not having filed its financial statements for 2014/2015 yet. It cannot file its financials without obtaining a further government guarantee. The airline has, however, managed to extend the deadline for compliance in Hong Kong until the end of September.
READ: SAA warned to file financials, overhaul board
"The extension has given us more room to resolve all matters that may be outstanding from a compliance point of view," SAA spokesperson Tlali told Fin24 on Wednesday.
Earlier on Wednesday Parliament's Standing Committee on Finance expressed concern about reports that SAA could be deregistered in Hong Kong if its financials are not finalised.
In July Gordhan said SAA requires a whole new board and an experienced management team. He did add, though, that such a new board and management team could include existing members and “new blood”.
Gordhan also said a turnaround strategy should be implemented for the airline to be able to continue and that the process of trying to find answers to its challenges are continuing.
"In order for a company to finalise its annual financial statements on a going concern basis, it is required to demonstrate that it is solvent and will be able to meet its obligations as they fall due over, at least for the next 12 month period," National Treasury told Fin24.
It pointed out that the additional government guarantees required for SAA to demonstrate that it does indeed meet these requirements, would have to be reflected in the notes to the airline's financials.
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