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How did SA Express use R1.2 billion in bailouts before liquidation?

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Dear MyPE

SA Express did not report on key compliance requirements for taxpayer-funded bailouts to the value of R1.2 billion over the last year and the additional R164 million allocated in the medium term. This information was tabled in a report provided to Parliament’s Appropriations Committee this week.

As a condition of its bailout, SA Express was required to “report to the Minister of Finance, the Auditor General of South Africa and parliament on the utilization of the R1.2 billion which was allocated to SA Express Airways in 2018/19”, however, this was not complied with according to the report, and the status of how this money was used remains unclear.

It remains unclear if the R164 million was paid to SA Express before it was placed into liquidation.

Furthermore, SA Express was required by National Treasury to (1) ensure that no incentive bonus pay-outs were made to executives in years where bailouts were received and (2) become tax compliant by ensuring that where taxes have been deducted from employees, that these deductions be paid over to the South African Revenue Service within the required timeframes and not withheld for other purposes. The report indicates that no information was provided to Treasury as to whether or not these conditions were complied with.

While the status of SA Express’ finances remains murky, employees were told to fend for themselves and not paid for their final month of work at the entity.

SA Express’s status as placed under provisional liquidation recently should not deter the government from holding individuals entrusted with taxpayers’ money to be held to account.

The DA will be tabling questions to Finance Minister Tito Mboweni regarding how bailouts were paid without ensuring conditions were met, and further will be writing to the Minister to request an investigation into this non-compliance and who was responsible. As South Africa faces an increasingly constrained fiscal future, taxpayers cannot afford government expenditure that does not produce value for money.

Regards

Ashor Sarupen MP
DA Member on the Appropriations Committee

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