Treasury must urgently clarify how SAA funding requirements will be met

The DA welcomes Finance Minister, Malusi Gigaba’s, press briefing on the matter of the Public Investment Corporation (PIC) and funding for SAA.
However, National Treasury must urgently clarify how the airline’s funding requirements that are required in a mere four days are going to be met and whether section 16 of the Public Finance Management Act will be invoked again.
Rather than making matters ‘clear and clean’ as suggested by Treasury Director General, Dondo Mogojane, the press briefing has raised more questions than answers.
The Ministers and Director General of National Treasury confirmed that:
• Treasury has had extensive discussions with the PIC on possible funding for the SAA bailout;
• Some lenders to SAA will not extend some or all of their loans to SAA beyond Saturday; and
• There is no possibility of a Special Appropriations Bill in time to secure funding to meet the SAA lenders repayment deadline.
Despite what was confirmed, the uncertainty over how the SAA funding crisis is going to be dealt with remains.
This uncertainty cannot remain until the Medium Term Budget Policy Speech (MTBPS) process is completed and the people of South Africa cannot afford to be left in the dark as to the details of the full recapitalisation plan for SAA that Treasury says will amount to R10 billion in the current 2017/18 financial year.
This uncertainty will have a negative impact on the South African sovereign ratings and must be clarified long before the MTBPS.

Myeni approached PIC for R6 billion for SAA

The DA has noted the media report that Ms Dudu Myeni has asked the Public Investment Corporation (PIC) for R6 billion to bail out beleaguered South African Airways (SAA), an airline that she has basically run into the ground.
While the PIC reportedly refused these requests this is yet another reason, to add to the mountain of reasons to remove Myeni. She now appears to be involved in the planned raid on pensioners’ money to prop up SAA and other bankrupt State-Owned Enterprises.
PIC boss, Dan Matjila, apparently had to answer to allegations against him that were mysteriously apparently leaked after he turned down Myeni’s request. It’s concerning that Matjila is apparently unable to do his job without political interference.
The Minister of Finance, Malusi Gigaba, is dead wrong. The presence of Ms Dudu Myeni on the SAA board at all, let alone as Chair, is neither a legal requirement nor is it prudent. In fact, it is downright irrational and completely irresponsible of Gigaba to try to find technical means to retain Myeni on the SAA board.
SAA has been in constant need of rescuing, facing a R10 billion funding crisis in a few days’ time. The setbacks for SAA continue to pile up:

  • Citibank has reportedly refused to extend their R 1.8 billion loan beyond the 30th of September 2017;
  • The balance of the lenders of the R 6.8 billion due for payment by the 30th of September 2017 has apparently indicated their reluctance to extend their loans particularly if Myeni remains on the SAA board;
  • The international ratings agencies are watching how Gigaba handles the SAA crisis very closely; and
  • There is no time left for any special appropriation bill to be passed by Parliament before the 30th of September 2017.

With Matjila facing an internal audit for doing his job, it’s difficult to have faith in the PIC when the politically connected seek access to the R1.9 trillion of pension money that Matjila manages to further enrich themselves. It’s unethical to use the citizens’ hard-earned pension funds to rescue the failing SAA, once again.
Despite all this, Gigaba is prepared to put the economic future of South Africa, and the 9.3 million unemployed South Africans, at risk in order to comply with the wishes of President Jacob Zuma to keep his close friend Dudu Myeni on the SAA board.

Gigaba must keep his hands off the PIC

Reports that the National Treasury is trying to force the Public Investment Corporation (PIC) to commit to providing an alarming R100 billion to bail out the numerous struggling State-owned Enterprises, including R12 billion for South African Airways (SAA), are disturbing, to say the least.
The PIC oversees the biggest fund in Africa, managing some R1,9 trillion in assets mainly belonging to the Government Employees Pension Fund (GEPF).
While the DA has repeatedly warned of this possibility in particular for the SAA bailout, these reports confirm the possibility that the Minister and Deputy Minister of Finance, Malusi Gigaba and Sfiso Buthelezi, who is also the Chairperson of the PIC, are planning a raid on the pensions of millions of hard-working government employees and pensioners.
It is therefore deeply concerning that there is also allegedly a plot to remove the PIC’s current CEO, Dan Matjila, which was reportedly a greedy attempt by the Gupta’s to hi-jack the PIC and loot from the people of our country.
Gigaba is yet again seemingly at the centre of a push to put the pensions of millions of government employees at risk, and in the process playing the role of the mismanagement and corruption enabler.
It seems that, given a very open-ended investment mandate given to the PIC by the GEPF, the PIC would be able to make billions of rands of pensioners funds available for “investments” in mismanaged SOE’s such as SAA without the PIC first getting the go-ahead from the GEPF.
SAA has had many turn-around strategies in the past which have not worked and the new ‘plan’ feels like dejavu with Dudu Myeni at the helm of this nightmare. Myeni must go and SAA needs to be put under business rescue so that it can be stabilised and privatised.
Gigaba must not be allowed to plunder the PIC and the future financial security of government employees just to bail out utterly dysfunctional State-owned Enterprises, which have been run into the ground under the ANC.

BOKAMOSO | State capture: SA must build a culture of individual accountability

Strong institutions require individual accountability, and they require strong individuals who can effect accountability. Ask KPMG, which is now under heavy fire for enabling and benefitting from state capture. They’ve learnt this lesson, but it may be too late. Their formal systems were slow to hold individual decision makers responsible, and now the entire organisation is at risk. At best it will suffer major reputational damage. At worst, an outraged (and accountability-hungry) public will mete out an inappropriately severe punishment, forcing clients to dump KPMG, causing the entire organisation to collapse like the Gupta’s PR firm, Bell Pottinger, did last week.
Without doubt, all those decision makers at KPMG who were responsible for enabling or turning a blind eye to Zupta state capture must be held to account and criminal charges should be pursued against them. And KPMG must accede to Gordhan’s request for full disclosure of KPMG’s role. But to shut down the whole company is to wield a blunt instrument that is unlikely to achieve real justice. The fact is, when leaders are able to evade accountability, it puts their whole organisation or institution at risk. And this is exactly what is playing out in our democracy. We have failed to hold individual political leaders responsible.
All evidence – and there is plenty to go by in former Public Protector Thuli Madonsela’s report State of Capture and in the 200 000 GuptaLeaks emails – points to Zuma, his son Duduzane, the Guptas and cabinet ministers Malusi Gigaba, Mosebenzi Zwane, and Lynne Brown as the main state capture players. And yet not a single prosecution has been launched.
The DA has laid criminal charges against all the main state capture players, but SAPS, the Hawks, and the NPA have done nothing at all. If the DA were in power, a Special Investigating Unit would have been launched. Above all others, the duty to bring these perpetrators to book rests with NPA head Shaun Abrahams, who is nowhere to be seen. He has failed us immeasurably.
And the National Assembly has failed in its constitutional duty to hold these individuals to account. The ANC rejected the DA’s request for an ad hoc committee to investigate all the allegations. Instead, in June 2017, four Parliamentary Portfolio Committees – Public Enterprises, Home Affairs, Public Service and Administration and Mineral Resources – were tasked with “urgently” probing allegations. These have proceeded at a snail’s pace. Only the Public Enterprises Committee has begun to hold hearings. Lynne Brown stated in that committee that there was nothing untoward between Trillian and Eskom. And yet since then, much incriminating evidence has come to light. We have referred Brown to the Ethics Committee for misleading the public.
Three months have passed, yet the other three committees have failed to summon a single minister. Not even Malusi Gigaba who, as Minister of Home Affairs, used his personal discretion to grant naturalised citizenship to the Guptas, enabling them to classify as BEE recipients and access tenders. Bizarrely, the Director General has been suspended for this decision, even though he opposed it.
This is a massive indictment on Parliament, and an indication of just how weak the institution has become – because the ANC believes it is untouchable electorally. Section 92 of the Constitution states that: Members of the Cabinet are accountable collectively and individually to Parliament for the exercise of their powers and the performance of their functions. Parliament needs to find and use its teeth. It must establish a properly resourced ad hoc committee to undertake a thorough, holistic investigation. And then it must advise the President that these ministers are unfit to hold office.
Last week, the DA was in court to try to force the President to abide by former Public Protector Thuli Madonsela’s instruction to him to establish a judicial inquiry into state capture, led by a judge appointed by Chief Justice Mogoeng Mogoeng. The DA was also in court last week to try to force the NPA to prosecute the President on 783 counts of corruption. We await rulings on both these cases. Public Protector Busisiwe Mkhwebane is failing South Africa too. Her investigation of these ministers should be an urgent priority for her office.
The DA believes strongly in individual accountability. (We have just fired a councillor in Johannesburg, for wrongdoing.) The ANC eschews individual responsibility in favour of the collective. They have consistently protected guilty individuals and so they, as a collective, must take responsibility. The entire organisation deserves to be rejected by the electorate. Whereas the majority of KPMG’s employees played no part whatsoever in enabling Zupta state capture, the same cannot be said of the ANC. Dr Makhosi Khoza, who resigned from the ANC yesterday, said in her resignation speech:
If we were to prosecute all known corrupt cases including those implicated in the Gupta e-mails‚ almost 80–90% of the ANC leadership at all levels of government would have to replace their shiny tailored suites and pretty dresses with orange overalls.
Corruption is not a victimless crime as our President would have us believe. On the contrary, it is a crime against every single South African, and we are all very much the poorer for it. Many will be poorer still if the Zuptas succeed in capturing their next target for corruption: the Public Investment Corporation (PIC), which manages the Government Employees’ Pension Fund. This week, Zupta cronies tried unsuccessfully to remove PIC chief executive, Dan Matjila. They will not give up easily. And nor should South Africans. As the KPMG affair has shown: ultimately, the power lies with the people. We must use it wisely.

Deputy-Minister Sifiso Buthelezi needs to clarify exactly what is going on at the PIC

The Deputy-Minister of Finance, Sifiso Buthelezi, suggests there is “no truth” to the claim that there is an attempt to remove Dr Dan Matjila, the Chief Executive Officer of the Public Investment Corporation (PIC), at a special board meeting on Friday 15 September 2017.
However, reports  claim that:
• the Deputy Chairperson of the PIC, Xolani Mkwanazi, has written to the Dr Dan Matjila requesting him to respond to allegations concerning the funding of a project linked to a partner at a special board meeting tomorrow; and
• that the allegations are an attempt to remove Dr Dan Matjila from his position in order to crowbar a person, such as Brian Molefe, into the top job at the PIC.
The PIC’s board has a duty to deal with bona fide allegations of corruption but these allegations appear to amount to a “political hit”, not dissimilar to previous “political hits”, contained in the “Project Spider Web” dossier, which appears to have been designed to advance the interests of President Jacob Zuma, and his clients, the Guptas.
The Deputy Minister of Finance, Sifiso Buthelezi, who is also the Chairperson of the PIC, needs to act to protect the integrity of the institution, and to protect the savings of pensioners, by making a public statement clarifying exactly what is going on at the PIC.
We cannot sit back and allow President Jacob Zuma, and his number one clients, the Guptas, to get their hands on the R1.8 trillion under the management of the PIC.

Gigaba looking to take R6 billion from pensioners to fund SAA

Today the Minister of Finance, Malusi Gigaba, confirmed that there will be no privatisation of South African Airlines (SAA) and that pensioners’ money is being considered to fund the airline.
All of this despite the fact that the airline is practically bankrupt, recording a loss of R 1.4bn for the first three months of the current financial year.
SAA’s corporate plan shows that the Public Investment Corporation (PIC) is one of the identified sources under consideration for funding SAA to the tune of R 6bn. This revelation was confirmed by the Finance Minister in Parliament today.
Considering that privatisation is off the cards, it means that these funds would have to come in the form of a loan or a bailout. This puts millions of pensioners at the risk of losing their hard earned money.
The DA is strongly opposed to the idea of targeting vulnerable pensioners to bailout SAA, which continues to make losses with no signs of turning around in sight. The DA will continue its fight to protect the vulnerable in the face of the black hole that is SAA.