The Department of Public Enterprises says it has noted with great disappointment the final liquidation order granted by the South Gauteng High Court on Wednesday, placing SA Express in final liquidation.
This comes after the liquidators could not find a suitable buyer for the regional airline, meaning the airline will never take to the skies again.
“The department sympathises with the employees of the regional airline, who were not able to receive any compensation after years of working at SA Express,” Public Enterprises said.
The liquidation of SA Express, according to the department, is a result of many factors, including years of bad management, State capture and corruption, exacerbated by the impact of the COVID-19 pandemic on the global aviation market.
“One of the suppliers of the airline to save the business placed SA Express in business rescue. However, due to the current fiscal constraint, government was not able to provide the post-commencement finance to implement a successful rescue process,” the department explained.
The business rescue practitioners (BRP) then applied for provisional liquidation, which was granted in April 2020.
The department stated that there have been three different attempts by provisional liquidators to attract credible buyers, including a crowdfunding initiative by employees to buy the airline. However, all of them were futile since none had the financial resources to sustain the business post the sale.
“It is against this background that the department empathises with all the employees of SA Express, who started the regional airline and built it into a national brand, but who will walk away without any incentives.”
The department believes the liquidation brings into stark reality the impact of State capture, corruption and bad management in the country’s State-owned enterprises (SOEs), especially the devastating consequence on the livelihoods of employees of the regional airline.
“The Judicial Commission of Inquiry into State Capture Part 1 report – released earlier this year by Chief Justice Raymond Zondo – on SA Express detailed evidence of deep-rooted corruption and fraud at the regional airline.”
The findings of the first part of the report detailed how SA Express was improperly awarded a five-year contract by North West in respect of the Mafikeng-Johannesburg and Pilanesburg-Johannesburg and Cape Town routes, the department said. However, funds were paid with no services rendered.
“There is evidence that public funds were syphoned out of the North West government’s coffers to various individuals and organs of State,” the department said.
By 2019, the department said a criminal investigation was underway and High Court litigation had been instituted.
“However, by the time the Commission heard evidence emanating from this investigation, in June 2019, the criminal process had not gained any substantial momentum.”
The department has since urged law enforcement agencies to speed up investigations into the allegations of corruption and fraud and bring to book those responsible for the damage.