Myeni stay at SAA deemed illegal

SOUTH African Airways (SAA) chairwoman Dudu Myeni’s continued stay at the airline may be technically unlawful in terms of the carrier’s Memorandum of Incorporation and the Companies Act.

Myeni’s term at the helm of the airline’s board came to an end at the beginning of this month. However, Finance Minister Malusi Gigaba has asked her to remain on board until SAA holds its annual general meeting.

Business Day understands SAA has not filed notice with the Companies and Intellectual Property Commission (CIPC) that Myeni’s stay at the airline had been extended.

Such notice is required within 10 business days after a director’s term ends.

The commission enforces the act in terms of which directors are appointed.

In addition, SAA’s Memorandum of Incorporation (MOI) compels the shareholding minister, in this instance Gigaba, to consult with the cabinet when it comes to matters concerning the board. Mayihlome Tshwete, Gigaba’s spokesman, said on Monday the minister “will consult with cabinet on this [Myeni extension] and further changes to happen at board level”.

Tshwete was at pains to point out that “this is a month’s extension, not an appointment”.

SAA spokesman Tlali Tlali had not commented by the time of going to print.

Asogaren Chetty, who is at the governance, surveillance and enforcement unit of the companies commission, said: “In terms of section 70 (6) of the Companies Act, every company must file a notice with the CIPC within 10 business days after a person ceases to be a director of the company. Further, according to SAA’s MOI filed with the CIPC, clause 13.7.2 states that a person ceases to be a director and a vacancy on the board arises when the director’s term of office expires.”

In terms of clause 13.7.1, the minister responsible for SAA had the authority to fill vacancies on the board in consultation with the cabinet.

“Therefore it would appear that, in terms of the law, Ms Myeni’s term of office ended on September 2 2017 and SAA has 10 business days to inform the CIPC of that event,” said Chetty.

There are legal consequences for a director if they were not correctly appointed in terms of the act.

“Specifically, section 77 (3) of the act states that a director of a company is liable for any loss, damages or costs sustained by the company as a direct or indirect consequence of the director having acted in the name of the company, signed anything on behalf of the company, or purported to bind the company or authorise the taking of any action by or on behalf of the company, despite knowing that the director lacked the authority to do so,” Chetty said. — DDC