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South African Express Annual General Meeting Appoints New Auditors

         Date: 2012-08-15

           Tag: South African, South African Express

Summary: The Minister of Public Enterprises, Malusi Gigaba and Directors of the Board of South African Express (SAX) held their Annual General Meeting (AGM) at Airways Park, Kempton Park today.

The Minister of Public Enterprises, Malusi Gigaba and Directors of the Board of South African Express (SAX) held their Annual General Meeting (AGM) at Airways Park, Kempton Park today.

Minister Gigaba was accompanied by his Deputy, Mr Bulelani Magwanishe and senior Departmental officials. The financial year 2011/12 has been a tough and challenging economic year for the global airline industry and SA Express has not been immune from such challenges.

Up until 2011, the SAX had been considered the jewel of the Public Enterprises portfolio, with consistent reported profits. Regrettably, the past year has seen a drastic decline in amongst others, performance, brand and reputation management and internal controls.

The AGM was unanimous in their view that the failure of the company to present Audited Financial Statement at the meeting is irregular.

The irregularities relate to non-compliance, miss-statement of financial statements and evidence provided to the Auditors which, in their opinion, did not meet the auditing standards. This has led to an adverse opinion from the Nkonki Auditors.

The relationship between all parties has deteriorated to such an extent that it was prudent for the Shareholder to engage both parties to address the impasse that found itself in the public domain.

The appointment of the External Auditors is subject to annual review at the Annual General Meeting by the Shareholder. Similarly the Board is appointed for a three year term subject to the annual review. There is a need for a more hand-on shareholder oversight of the regional airline and it is in lieu of the current challenges that it is prudent to review the Board. The shareholder has therefore announced a new Board of Directors due to the high turnover of the previous Board, which saw a record number of non-executive directors' resignations.

The new Board has been appointed and the Chairperson of the Board is Mr Andile Mabizela who has strategy, aviation and legal background. He will be supported by a multi-skilled Board of Directors and their primary mandate is to turnaround the airline.

The new board comprises of Mr Ezrom Mabyana, Ms Karabo Tshailane-Nondumo, Ms Neo Priscilla Moshimane, Mr Shumani Tshifularo, Ms Nosipho Gxumisa, Mr George Mothemba, Ms Noni Dibate and with Dr. Bridget Ssamula relected on the new board for the purpose of ensuring continuity and institutional memory.

Minister Malusi Gigaba stated that new board would have to comprehend and apply the mandate of the company, which is "to be the regional African carrier of choice". The newly appointed Board is required to address a number of critical dimensions facing the airline; among those being crisis management, stabilising operations and building brand and reputational confidence.

Minister Gigaba also emphasised the importance of strengthening internal controls within the state owned company, stating that "systems within the entity would have to ensure that management is aligned to the shareholders expectations and national objectives'. Minister Gigaba as shareholder representative commended the previous board for their contribution towards SAX.

In support of turning the airline around and navigating through the turbulence, the Auditor-General has been appointed to take over the audit function from Nkonki Auditors and would commence the audit shortly. The Auditor-General would first commence with the audit of the 2011/12 financial year.

The AGM requests that the Auditor-General be afforded time to review the 2011/12 financial year and make the necessary recommendations to ensure that SA Express adheres to the generally agreed accounting standards and the requisite legislative frameworks. The shareholder will communicate to the public and to Parliament once the process has been concluded.

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