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National Treasury hiding the true cost of SAA renewed loans

The National Treasury appears to be attempting to hide the true cost of South African Airways (SAA) latest bailout with its response to the Democratic Alliance’s (DA)  for details of interest rates charged on renewed loans to SAA, DA Shadow Deputy Minister of Finance  Alf Lees said in a statement on Monday

Alf said the request was supported by the Standing Committee on Finance.

“Standard Bank, ABSA, Nedbank and other domestic lenders to SAA were due to be paid R5.0 billion on September 30. 2019. These lenders were convinced to roll over their loans provided that certain conditions were met by SAA. One of which was that Dudu Myeni be removed from the SAA board, a condition which was reluctantly complied with on  November 3, 2017,” said Lees

Lees said It was suspected that a further condition made by the domestic lenders was that the interest rates charged on the renewed loans would be increased.

“Consequently the DA requested that the Minister of Finance and National Treasury provide the Standing Committee on Finance with details of the interest rates charged by the domestic lenders,” said Lees.

National Treasury initially responded, on November 1, 2017 that the interest rates were confidential.

“This response was clearly nonsensical as the Standing Committee on Finance had previously been provided with a full list of all lenders to SAA together with the amounts, maturity dates and interest rates,” said Lees.

The Standing Committee on Finance supported the DA’s request for details of the interest rates for SAA’s renewed loans and instructed the National Treasury to provide the details.

National Treasury said on Monday, replying to DA that  interest rates charged by lenders on loans to SAA that were rolled over at the end of September 2017 have changed, saying The exact figures need to be requested from SAA.

“This is an unacceptable response from National Treasury, which attempts to frustrate its accountability to parliament. SAA falls under the oversight of National Treasury and we believe is obligated to provide the information required by the Standing Committee on Finance,” added Lees.

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