Trea­sury has Myeni in its crosshairs

Two SAA ex­ec­u­tives have been fired but the hear­ing also fin­gered the for­mer chair­per­son

Mail & Guardian - - News - Sabelo Sk­iti

The trea­sury, SAA’s sole share­holder, is de­ter­mined to hold to ac­count dis­graced for­mer board chair­per­son Dudu Myeni for al­legedly mas­ter­mind­ing a botched multi­bil­lion fund­ing deal for the air­line, for which two se­nior ex­ec­u­tives were dis­missed this week.

Deputy Fi­nance Min­is­ter Mondli Gun­gubele, whose role in­volves work­ing closely with SAA, said no stone would be left un­turned to hold Myeni ac­count­able.

“In this coun­try we must find a way to make sure that no one gets away with mur­der at the ex­pense of the state,” he said.

“We have a lot of peo­ple who ei­ther ran the state reck­lessly or de­frauded the state, who just af­ter ex­it­ing the sys­tem, sit at home wealthy and noth­ing hap­pens. I think there is a huge chal­lenge as far as that is con­cerned.”

Gun­gubele, who is at an African Union sum­mit in Mau­ri­ta­nia, said he would sit down with SAA’s lead­ers for a brief­ing on is­sues raised in the chair­per­son’s re­port re­gard­ing Myeni.

“We want them to ad­vise [us] what op­tions we have in as far as those who are meant to be ac­count­able is con­cerned,” he said.

“What­ever way that is legally at our dis­posal to deal with who­ever has com­mit­ted crime and is ac­tu­ally due to ac­count, we will leave no stone un­turned to make sure that those are made to ac­count.

“The pres­i­dent has re­cently is­sued a lot of procla­ma­tions for in­ves­ti­ga­tions by the SIU [special in­ves­ti­gat­ing unit] and that is a clear mes­sage that we want to do ev­ery­thing to en­sure that dam­ages are paid, the losses are cor­rected, and those who have ac­tu­ally hurt the state are made to pay.”

Myeni, a close con­fi­dante of for­mer pres­i­dent Ja­cob Zuma and chair­per­son of the Ja­cob Zuma Foun­da­tion, has served on the boards of sev­eral state in­sti­tu­tions, in­clud­ing SAA and the Mh­lathuze wa­ter board, where she sur­vived numer­ous scan­dals re­lated to med­dling in op­er­a­tions and in­flu­enc­ing pro­cure­ment and other func­tions.

Many civil ser­vants and fel­low board mem­bers have de­tailed how she used her prox­im­ity to Zuma — even invit­ing board mem­bers to his home for meet­ings — to ex­ert un­due in­flu­ence over them.

Her back­room pres­ence in the SAA deal was brought to the fore in the dis­ci­plinary hear­ing find­ings that led to the air­line’s chief fi­nan­cial of­fi­cer, Phumeza Nhantsi, and the tech­ni­cal chief ex­ec­u­tive of­fi­cer, Musa Zwane, be­ing dis­missed for gross mis­con­duct. Nhantsi and Zwane ap­peared be­fore a hear­ing chaired by Nazeer Cas­sim SC last week in re­la­tion to an aborted R15-bil­lion debt con­sol­i­da­tion deal in 2015, when SAA ap­pointed an un­known bou­tique fi­nancier, BnP Cap­i­tal, to source the funds in re­turn for a R256-mil­lion fee.

The cash-strapped air­line said at the time that the deal would yield in­ter­est sav­ings of up to R500mil­lion and al­low SAA to un­lock fur­ther gov­ern­ment guar­an­tees, al­low­ing it to con­tinue bor­row­ing money to sur­vive.

Cas­sim noted Myeni’s role through­out the trans­ac­tion, which in­volved a bid to ac­cess the funds from an­other un­known com­pany, Seacrest, whose fund­ing would have come from Rus­sia, and an at­tempt for SAA to get the same Rus­sian funds from the Free State De­vel­op­ment Cor­po­ra­tion — a state-owned en­ter­prise.

Af­ter then fi­nance min­is­ter Pravin Gord­han pulled the plug on that plan, SAA’s board de­cided to ap­point BnP as the trans­ac­tional ad­viser.

“Hav­ing re­gard to ob­jec­tive facts of the mat­ter, I am of the prima fa­cie view that the then chair­per­son, Dudu Myeni, or­ches­trated the en­tire trans­ac­tion com­menc­ing with the fund­ing of [the] R15-bil­lion debt for an un­to­ward pur­pose. The pur­pose be­ing to in­volve BnP and en­rich BnP and on the prob­a­bil­i­ties to share ill-got­ten fi­nan­cial pro­ceeds to the detri­ment of SAA,” Cas­sim said.

Me­dia re­ports at the time re­vealed how BnP hid from SAA the fact that its reg­is­tra­tion with the Fi­nan­cial Ser­vices Board had been ter­mi­nated — a fact that would have meant au­to­matic dis­qual­i­fi­ca­tion.

Cas­sim found Nhantsi and Zwane guilty of gross dis­hon­esty for pen­ning a rec­om­men­da­tion of a R49-mil­lion can­cel­la­tion fee, with no ba­sis in law, once SAA can­celled the deal.

He said the two al­lowed them­selves to be pres­sured by Myeni into a deal that was clearly de­signed for her ben­e­fit and not SAA’s.

“On his [Zwane’s] own ver­sion, Dudu Myeni pres­surised him to make a pay­ment to BnP of monies not due to BnP. This is noth­ing short of theft,” Cas­sim con­tin­ued.

“She en­quired what his limit was to make the pay­ment and to re­duce the pay­ment amount to be within his limit. He re­sisted, but made the rec­om­men­da­tion to the board.”

Myeni had not re­sponded to ques­tions at the time of print.

Though SAA had also charged the two with fail­ure to re­port sus­pected cor­rup­tion to the rel­e­vant au­thor­i­ties deal­ing with eco­nomic crimes, Cas­sim ex­on­er­ated them on the ba­sis that SAA it­self had failed to make the same re­port.

Both ex­ec­u­tives en­tered pleas of not guilty to four charges re­lated to their in­volve­ment in the trans­ac­tion.

Nhantsi, who has kept quiet through­out the sus­pen­sion, said in a state­ment that she was “deeply dis­ap­pointed” with the com­pany’s de­ci­sion to fire her and Zwane.

“In­deed, it is re­gret­table that the com­pany has rushed to pub­licly con­demn me in the face of my com­plete de­nial of wrong­do­ing,” she said. “The al­le­ga­tions against me have no foun­da­tion. At no time did I en­gage in con­duct which I be­lieved to be in vi­o­la­tion of South African Air­ways cor­po­rate gov­er­nance poli­cies.”

Zwane is­sued an apol­ogy on Wed­nes­day night, say­ing he took full re­spon­si­bil­ity for what hap­pened.

“It’s im­por­tant to note that I took up this po­si­tion when no one in our team was pre­pared to risk their ca­reers,” he said.

Cas­sim could not make a rul­ing against the two on a charge of not re­port­ing the at­tempted fraud to law en­force­ment. “Firstly I am not in­formed whether SAA has in fact re­ported BnP to the au­thor­i­ties. If not, why not, bear­ing in mind the con­tention of SAA that the two ac­cused em­ploy­ees were di­rectly or in­di­rectly ad­vanc­ing the in­ter­ests of BnP.”

Flight risk: For­mer SAA chair­per­son Dudu Myeni al­legedly put pres­sure on two se­nior staff mem­bers and ‘or­ches­trated’ a R15-bil­lion deal, which was not in the air­line’s in­ter­est. Photo: Deon Raath/Gallo Images

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