Unions set to challenge Mango’s voluntary business rescue

The Mango Pilots Association, (MPA), the South African Cabin Crew Association (SACCA) and the National Union of Metalworkers of South Africa (NUMSA) believe the decision opens up the business rescue system for abuse by companies seeking to block liquidation applications.

The trio of unions are set to challenge the decision handed down by the Johannesburg High Court on Tuesday after the court ruled against their application for business rescue. 

Numsa spokesperson Phakamile Hlubi-Majola says the ruling sets a dangerous precedent. 

“We are disappointed with the ruling. We sought a fair, open and transparent process in collaboration with Mango management which is why we approached the court. Given the disastrous business rescue process which took place at SAA, we hoped that this time, things would be different.

“This is why we wanted the court to appoint Ralph Lutchman so that we could ensure that business rescue was done quickly, efficiently, and as it is envisioned in the Companies Act."

The low cost airline Mango, a subsidiary of SAA, is faced with a cash crunch.

Earlier this year, the airline was grounded by the Airports Company South Africa (ACSA) after failing to pay landing and take-off fees.

Staff members were also without salaries.

“We want to ensure a genuine turn-around strategy which is not based on retrenchments, but on making the business viable in the long term. We also want to prevent another wasteful rescue process where consultants earned in excess of R200 million, whilst workers were denied their salaries, and starved for many months as a result,” Hlubi-Majola adds. 

 “We are concerned about the possibility that a dangerous legal precedent in the Companies Act has been set, potentially exposing it to widespread abuse in the future. Companies will theoretically, be able to pass a business rescue resolution but never file it.”

“We eagerly await the judges reasons for finding in favour of Mango’s application.”