Un­der Myeni, SAA is in dan­ger of turn­ing into a fly­ing cir­cus

Eye

Weekend Argus (Saturday Edition) - - ISSUES - WIL­LIAM SAUNDERSON–MEYER Jaun­diced

ONE DOESN’T have to be a rocket sci­en­tist to fig­ure out that South African Air­ways is in a fi­nan­cial death spi­ral and un­less the heavy hand of board chair­woman Dudu Myeni – is re­moved from the joy­stick, it may crash and burn.

There’s a clue in that SAA has had seven chief ex­ec­u­tives in three years. A couple were sus­pended amid al­le­ga­tions of fi­nan­cial im­pro­pri­ety. A couple re­signed and a few oth­ers were nudged out.

There’s an­other clue in the fact that its chief fi­nan­cial of­fi­cer, Wolf Meyer, re­signed last week. He had been crit­i­cal of Myeni’s in­ter­fer­ence in rene­go­ti­at­ing a deal with Air­bus.

This deal had al­ready been rene­go­ti­ated in March, se­cur­ing sav­ings of R1.5 bil­lion.

The sub­se­quent in­sis­tence of Myeni on yet an­other rene­go­ti­a­tion, the Trea­sury has warned, is likely to have se­ri­ously neg­a­tive fi­nan­cial con­se­quences for the air­line, which is kept fly­ing only through high­oc­tane gov­ern­ment guar­an­tees that now to­tal R14.5bn.

There’s an­other clue in that, al­though SAA is os­ten­si­bly un­der the over­sight of the Trea­sury, Fi­nance Min­is­ter Nhlanhla Nene has at times not been kept briefed by the SAA board.

And be­fore SAA was moved to the Trea­sury, while un­der the con­trol of the Depart­ment of Pub­lic En­ter­prises, Myeni was openly de­fi­ant of min­is­te­rial in­struc­tions.

There’s also a clue in the dis­af­fec- tion of its pro­fes­sional staff. Last week the SAA Pi­lots’ As­so­ci­a­tion took the un­prece­dented step of pass­ing a vote of no con­fi­dence – by 457 votes against two, with 11 ab­sten­tions – in Myeni and the board, de­mand­ing the board re­sign with im­me­di­ate ef­fect for flout­ing their fidu­ciary re­spon­si­bil­i­ties.

That they did so is not ev­i­dence of white re­sis­tance to the board’s trans­for­ma­tion agenda, as it is be­ing por­trayed. It is ev­i­dence, given they knew full well the board would take dis­ci­plinary ac­tion against them, of grave dis­quiet at an im­pend­ing dis­as­ter the gov­ern­ment is do­ing lit­tle to avoid.

So there’s a whole cookie trail of clues point­ing to po­ten­tially ter­mi­nal fi­nan­cial dis­tress, in­clud­ing that in Jan­uary SAA’s au­di­tors ini­tially wouldn’t sign off on last year’s an­nual ac­counts be­cause they had doubts whether SAA was still a go­ing con­cern.

It was only af­ter SAA whee­dled yet an­other fi­nan­cial guar­an­tee out the Trea­sury, to the tune of R6.5bn, that it was able to ta­ble its fi­nan­cial state­ments.

All of which makes SAA’s ur­gent High Court ac­tion against var­i­ous me­dia houses this week a fu­tile cha­rade.

In the early hours of Tues­day morn­ing, the car­rier got a gag­ging or­der pro­hibit­ing the pub­li­ca­tion of a leaked memo pre­pared by Ur­sula Fik­ilepe, SAA’s head of le­gal, risk and com­pli­ance.

The me­dia af­fected – Busi­ness Day, Me­dia24 and Mon­ey­web – were ap­par­ently not in­formed of the ap­pli­ca­tion, so did not op­pose it. They have since in­di­cated they will ap­peal against it, but in the mean­while have with­drawn the re­ports from web­sites, al­though the rul­ing came too late to af­fect print edi­tions of Busi­ness Day.

There are two ab­sur­di­ties. The first is the facile no­tion one can cork the news ge­nie once it has been let out the bot­tle. Any­one who mat­ters, in other words the hold­ers of SAA debt and the en­tire in­ter­na­tional fi­nan­cial world, have taken cog­ni­sance of the Busi­ness Day print re­port, which had for some hours ex­isted on web­sites, and fac­tored it into their as­sess­ments of the car­rier.

Nor does the or­der pre­vent the fur­ther cir­cu­la­tion of the memo’s con­tents out­side of South Africa.

The sec­ond ab­sur­dity is that, while the rest of the world knows ex­actly what is in the memo, the tax­payer, who ul­ti­mately foots the bill for SAA, has to squint be­tween the lines to work out what is hap­pen­ing. Given the history of SAA and that court doc­u­ments are in the pub­lic do­main, this is not too chal­leng­ing a task.

SAA’s af­fi­davit gives clues aplenty. It talks of “highly confidential in­for­ma­tion of a very sen­si­tive na­ture… (which) has the po­ten­tial to cause real and se­ri­ous rep­u­ta­tional and fi­nan­cial dam­age” to SAA and the gov­ern­ment.

Join the dots, dear reader. In the mean­while, fas­ten your seat­belts and as­sume the brace po­si­tion. Fol­low WSM on Twit­ter

@TheJaun­dicedEye

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.