BRPs have a fiduciary duty to SAA first, not creditors, shareholders – expert
SAA entered a form of bankruptcy protection in December and is fighting for its survival.
JOHANNESBURG - Experts said South African Airways (SAA) business rescue practitioners (BRPs) had a duty to the cash-strapped carrier and not the creditors waiting to get paid.
Last week, President Cyril Ramaphosa said his government did not agree with plans to cut some of the airline’s domestic routes, plunging rescue efforts into uncertainty.
SAA entered a form of bankruptcy protection in December and was fighting for its survival.
Specialists appointed to try and rescue SAA announced a raft of flight cancellations as part of efforts to conserve cash and make the airline more attractive to potential equity partners.
High Court advocate, Sello Alcock, said: “The law is very clear, once they [BRPs] go in there they get full management control and they owe a fiduciary to the company first and not to the creditors or the shareholder.”
However, Alcock said government should be kept in the loop about developments.
“So, that’s why we are hearing representations in a process where they should have been in the loop, in my humble opinion,” he said.