Ex­or­cis­ing Dudu Myeni’s ghost

CityPress - - Business -

From now on, the CEO of SAA would ac­tu­ally be al­lowed to run the place, said Fi­nance Min­is­ter Malusi Gi­gaba and new board chair Jo­hannes Bheku­muzi “JB” Mag­waza at this week’s “un­veil­ing” of the air­line’s new board.

The ghost of SAA’s re­cently de­posed chair Dudu Myeni was felt even though no one men­tioned her by name.

“It will be very im­por­tant go­ing for­ward that we have a very clear de­lin­eation of roles be­tween the share­holder, the board and the CEO,” said Gi­gaba.

“The CEO runs the air­line, he has to im­ple­ment the mea­sures. The CEO is the spokesper­son of SAA. Not the share­holder and cer­tainly not the chair.”

Mag­waza stayed on mes­sage: “One prob­lem here was the lack of clear de­lin­eation of roles. If these get blurred, you have a for­mula for chaos and gemors. The job of run­ning the com­pany be­longs to the CEO and his man­agers.”

SAA has to hold an an­nual gen­eral meet­ing be­fore the end of Jan­uary. This was orig­i­nally sched­uled to take place at the end of Oc­to­ber, but was post­poned due to the fi­nan­cial state­ments, which could not in good faith present the air­line as a “go­ing con­cern”.

Af­ter a re­cent R10 bil­lion gov­ern­ment bailout, the state­ments have been sent to the Au­di­torGen­eral, said Gi­gaba.

SAA’s tardy fi­nan­cial state­ments have post­poned the com­pany’s an­nual gen­eral meet­ings ev­ery year for four years, and this will be the last time, said the min­is­ter.

Half of the R10 bil­lion has been paid over to SAA so that it can pay its cred­i­tors and the rest will be paid to SAA in monthly in­stal­ments of about R1 bil­lion un­til April, said Gi­gaba.

New chance for old ideas

Gi­gaba is well ac­quainted with the turn­around strat­egy he this week in­structed the new SAA board to im­ple­ment.

In 2013, when he was pub­lic en­ter­prises min­is­ter, Gi­gaba was the per­son who pub­licly an­nounced the very same strat­egy.

It calls for an amal­ga­ma­tion of the three state air­lines – SAA, Mango and SA Express – and an op­ti­mi­sa­tion of their fleets.

That seems to mean en­sur­ing air­craft sizes are bet­ter matched to routes by tak­ing smaller planes out of Mango and SA Express to service re­gional routes in African coun­tries where SAA’s larger planes lose money.

The plan is still to sell a part of SAA to a pri­vate in­vestor.

This was an­nounced as a prob­a­ble so­lu­tion by the pre­vi­ous min­is­ter of fi­nance Pravin Gord­han in his 2016 Bud­get Re­view.

Gi­gaba said that this process was now in the new board’s hands.

They will de­ter­mine what per­cent­age to sell and try to gauge the in­vestor ap­petite, he said.

“Many peo­ple have shown an in­ter­est even be­fore we said we want it,” he said. “Air­lines and fi­nan­cial in­sti­tu­tions,” he added. He promised that the par­tial pri­vati­sa­tion would be done in the full light of day with no “un­der­handed, in-the-dark-type en­gage­ments”.

It will be the sec­ond time a mi­nor­ity share of SAA gets sold – 20% was handed to Swiss Air in 1999 for R1.4 bil­lion.

Swiss Air went bank­rupt shortly af­ter that, and SAA bought back the shares in 2002 for less than R400 mil­lion.

– De­wald van Rensburg

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