SAA gets brief reprieve in its bid to avoid being deregistered in Hong Kong

The authorities in Hong Kong have granted South African Airways (SAA) an extension until September 30 to submit regulatory documents and prevent the airline from being deregistered there, effectively halting its flights to the region.

This extension is in line with Hong Kong’s legislation, SAA spokesperson Tlali Tlali said on Wednesday afternoon.

“The extension has given us more room to resolve all matters that may be outstanding from a compliance point of view,” said Tlali.

SAA has claimed in the past there is nothing irregular about the request from Hong Kong. This was because SAA has not yet filed its financial statements for 2014/15, nor for 2015/16.

Tlali added that there is heightened engagement with national treasury to ensure that SAA continues to comply with the requirements of all jurisdictions where it operates globally.

Earlier on Wednesday, Parliament’s Standing Committee on Finance expressed concern about reports that SAA could be deregistered in Hong Kong if its financials are not finalised by September 6.

The committee also said the much-delayed tabling of SAA’s annual financial statements has now dragged on for an unacceptably long time and all concerned must urgently get the matter resolved.

Tlali indicated last week that it is highly unlikely that there will be service interruptions in September or October anywhere on SAA’s route network, including Hong Kong.

“Where concerns are raised by the relevant regulatory authorities, we continue to engage with them to ensure that we remain compliant and continue to operate,” he said.

Treasury – which is SAA’s shareholder representative – said on Wednesday that the airline’s financial position requires extensive and careful consideration, because of the potential implication for the South African as well as for country’s sovereign standing.

“In order for a company to finalise its annual financial statements on a going concern basis, the company is required to demonstrate that it is solvent and will be able to meet its obligations as they fall due over, at least for the next 12 month period,” national treasury said.

Finance Minister Pravin Gordhan indicated last week that a “good announcement” regarding SAA could be expected “shortly”.

Cash-strapped SAA published a funding request over the weekend, hoping to raise R16-billion from banking and non-banking financial institutions to meet its working and capital expenditure requirement, as well as consolidate its current debt portfolio.

Despite this step, SAA still rejects allegations that it should be placed under business rescue or even liquidation.
Tlali pointed out that a going concern government guarantee is needed to finalise the annual financial statements and that there are extensive, ongoing engagements with treasury to try to find a solution and provide certainty.

In July Gordhan was forced to request Parliament to grant an extension of tabling the much-overdue annual financial statements until September 15. – Fin24



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