Low-cost airline Mango was told by Minister Pravin Gordhan’s department of public enterprises to carry on trading, even though it was effectively bankrupt and continuing to do business may well have contravened the Public Finance Management Act and possibly exposed directors for failing to carry out their fiduciary duties.
While it is unclear what the final content of correspondence to the DPE was, the director-general sent an e-mail to Mango in recognition of receipt of a letter. In it, the department – which reports to Gordhan – responded with instructions to be patient and to carry on regardless.Gordhan’s position was made clear in the correspondence – there would not be another business rescue process under his watch.
This, in turn, raises the question whether Mango’s board should have placed it in business rescue or liquidated the company, despite the shareholder’s position. The resilient staff also faced angry customers during two days of grounding at the end of April, despite not knowing whether a pay cheque would arrive or not.Saturday Citizen sent a series of questions to the DPE’s Richard Mantu, SAA board chair Geoff Qhena via its corporate affairs office and Mango chair Peter Tshisevhe.
According to a dissection of the Companies’ Act by Werksmans Attorneys director Eric Levenstein on its website, financial distress of a company is defined when “it appears to be reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months, or it appears to be reasonably likely that the company will become insolvent within the immediately ensuing six months”.
The Democratic Alliance’s Alf Lees said: “There seems to be little doubt that the SAA subsidiaries and Mango, in particular, have been insolvent for a very long time that likely precedes the December 2019 start of the farcical SAA business rescue process.
An awesome days indeed? Finally I’m out of debt caused by that nonentity. I’m highly grateful for this wonderful recovery and help you’ve rendered to me and my family this save up my marriage for it’s not to be broken, I’m forever grateful JezziniSamir
How much will this cost us as taxpayers?