Cargo business as usual at SA Express

The state-owned airline, SA Express – despite a major financial question hanging over it – is still running all its passenger and cargo services as normal, cargo manager, Tando Mbikwana told FTW. “It’s business as usual at our cargo section,” he said. The question was first asked in July when the airline’s financial statements were reported to be “inaccurate” and “unreliable”, and public enterprises minister, Malusi Gigaba, asked the auditor-general to help reconstruct SA Express’s financials. “Reports come and you want to act, and then you realise that you don’t have sufficient information to act... what we want to know actually is what happened to the financials,” he was quoted as saying. Then this month Gigaba axed the board of SA Express, because there had been a “severe breakdown” in the relationship between him and the board because of a dispute about accounting systems. The public enterprises spokesman, Mayihlone Tshwete, told SABC radio news: “For two years we didn’t get financial statements from the company.” When the airline failed to present its 2011/2012 financial statements to Gigaba at its annual general meeting, there were allegations of irregularities, including a R32-million VAT payment allegedly mistakenly made to the SA Revenue Service (Sars). Assets had also allegedly been managed outside the guidelines of acceptable accounting practice. However, SA Express chairman, Lillian Boyle, who chaired an inquiry by the board, told the parliamentary portfolio committee earlier this year that the irregularities were “accounting errors that can be attributed to the bookkeeper’s incompetence and inexperience”. She said the mistakes had been perpetuated for a number of years, and that they had been continuously rolled over. But Boyle has since been replaced by Andile Mabizela, a well-known businessman with experience in the airline industry. Gigaba also replaced the auditors, Nkonki Incorporated, and said the new board should urgently resolve any outstanding issues concerning the annual report. The latest reports are that there had been disputes in accounts involving a staggering R1 billion, before the airline’s board was axed. Nkonki said in its audit report it was not able to verify more than R1bn in accounting adjustments in the 2010/2011 financial year, and could not express an opinion on the account. The public enterprises spokesman said this was “not a missing billion rand, it’s a billion rand of disputes”. “If management are involved in any wrongdoing and the Auditor General uncovers that, the minister will take steps... We will make whatever decisions are necessary.” The executive of another airline talking to FTW agreed with the “not a missing billion rand” statement, and said: “It’s not a matter of cash being removed. No airline of that size has that amount of money running fluid. It’s an accountancy movement of the amount.” But, he added, it’s a “bad reflection” on the airline’s management, saying that he saw it being an inappropriate handling of things like the value of the aircraft assets. “I would suspect that they revalued this amount to improve the bottom-line profit,” he said, “which determines the bonuses for management. It’s certainly not cash." INSERT ‘The latest reports are that there had been disputes in accounts involving a staggering R1 billion.’