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SA Express rapped over the knuckles

May 03 2013 19:09 Sapa

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Johannesburg - Parliament's portfolio committee on public enterprises has welcomed updated audited financial statements presented by regional airline SA Express, the committee said on Friday.

Committee chairperson Peter Maluleka said the company briefed the committee on the completed annual financial statement for 2010/2011.

The presentation by the airline followed the withdrawal and restatement of the 2010/2011 financial statements.

"The withdrawal came about as the result of a whistleblower (in September in 2011) alleging serious transgressions such as accounting errors, tax issues and a disclaimer audit opinion issued to the airline," said Maluleka.

Committee members expressed disappointment at the governance issues in the entity, he said.

"The committee warned that such serious contraventions should not be repeated."

On Wednesday, Business Day reported that SA Express would have to submit a business plan by the end of this month and report monthly to government to get the state guarantee of R539m that was being finalised.

This was part of the report presented by the airline before the committee.

The airline’s former external auditors, Nkonki Incorporated, warned in a note on the 2010/2011 financial statements that SA Express might not be able to continue as a going concern without state assistance, the newspaper reported.

MPs were shocked by the financial mess of SA Express’s accounts, which led to the withdrawal of its 2010/11 financial statements in November 2011 and their final tabling in Parliament only on Friday last week.

Substantial accounting adjustments were necessary, which converted an initially estimated net profit of R81m into a loss of R187m.

CEO Inati Ntshanga said the debt agreement with one of the aircraft financiers required SA Express to maintain equity of more than R1bn at all times, it was reported.

This was breached when equity fell to R463m after adjustments for accounting errors.


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