Justice Moroa Tsoka once said: “Business rescue proceedings are not for the terminally ill … nor are they for the chronically ill. They are not for the critically ill.” In the case of SAA, the state-owned airline’s heart stopped beating years ago and has since been defibrillated by the taxpayer.
It is not easy to apportion blame. The SAA board circumvented the courts by placing the airline in business rescue by resolution, effectively side-stepping any judge who would have followed Tsoka’s dictum and ordered the entity to be liquidated. However, the appointed practitioners, Siviwe Dongwana and Les Matuson, failed in their duty at the first meeting of creditors by not advising the creditors and other stakeholders that SAA was not capable of being saved.
One can only wonder, considering that months have gone by since June and there are more to come until they hand the airline back to its board, how big their payday will be now that finance minister Tito Mboweni announced the provision that would be made to “create a new SAA”. In addition, Dongwana and Matuson showed a dereliction of duty by failing to take action against those responsible for the state of SAA — a duty placed on them by the Companies Act.
The question is, what should Dongwana and Matuson have done to discharge their duty in good faith? First, they should not have tried to retrench the staff of SAA without including this process into the business rescue plan. This led to a drawn-out court process they eventually lost, again costing the airline dearly in legal fees.
it was a comradeship operation in disguise