SAA cleared for take off; Comair business rescue approved; KPMG pays damages

By Claire Badenhorst

  • South Africa’s national carrier will not be liquidated. This comes after government announced on Friday that it would ‘reprioritise’ R10.5bn from the national budget to save South African Airways (SAA). This will be the initial funding necessary to help with restructuring costs for the debt-laden airline. The time frame has yet to be finalised but administrators have said that if funds flow early enough, liquidation can be avoided.
  • Clear skies have also been forecast for Comair as its business rescue plan was approved on Friday. The plan will see several former Comair board members and executives invest fresh equity of R500m in return for a 99% shareholding. It also involves R600m in fresh loans from lenders, the voluntary retrenchment of several employees, as well as delisting from the Johannesburg Stock Exchange (JSE). The struggling airline, which owns Kulula and manages British Airways in South Africa, was forced into a form of bankruptcy protection in May but it expects to resume flights by the end of the year.
  • KPMG will pay damages to SARS employees who were affected by the rogue report it published in 2014. The audit firm was hired to conduct a forensic investigation into the High-Risk Investigations Unit (HRIU) within the revenue service and the report it produced suggested that the unit was using illegal methods. This led to the dismissal of dozens of senior SARS employees. The report was later found to be incorrect and KPMG will now pay damages to all those who are said to have been traumatised by the event.
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