‘Declare Myeni a delinquent director for life’
Protect the public from her, plaintiffs ask
OUTA and the SAA Pilots Association (Saapa) have asked the North Gauteng High Court in Pretoria to declare former SAA board chairperson Dudu Myeni a delinquent director for the rest of her life.
This was after they presented their 90-page indictment against Myeni, saying she was responsible for plunging SAA into financial chaos during her six-year tenure at the helm.
Yesterday, Myeni – on the second day of trial in a civil claim against her by Outa and Saapa – was again fingered in the illegal appointment of a “questionable middleman”, BnP Capital, into SAA’s plans for the recapitalisation of the national airline’s R15-billion debt.
Earlier, Outa and Saapa led evidence that Myeni – apparently acting on the instructions of former president Jacob Zuma – scuppered a business deal between SAA and Emirates, which could have secured the airline R1.4bn in annual profits.
Myeni’s board was also accused of having made overpayments to several companies which did business with SAA. The Ernst & Young report presented in court showed that most of those companies were not properly procured to provide services to SAA.
Outa and Saapa’s legal counsel, Carol Steinberg, asked for a harsher sentence against Myeni.
“I know that the minimum sentence that the court can determine for a person to be declared a delinquent director is seven years. But we have revealed instances which proved grounds for Ms Myeni to be declared a delinquent director. The plaintiffs are asking the court to declare Ms Myeni a delinquent director for the rest of her life. The public must be protected from Myeni for life,” Steinberg said.
Outa and Saapa also urged the court – if it finds Myeni guilty – to refer its findings to the National Prosecuting Authority (NPA) for a criminal prosecution. Detailing the illegal appointment of BnP, Steinberg said Myeni’s board overlooked the role of South Africa’s major banks to provide the muchneeded funding to service SAA’s debt.
Steinberg said that the appointment of BnP Capital as transaction adviser occurred without the proper procurement process that governs all state-owned entities (SOEs).
“The extension of BnP’s contract to include the sourcing of R15bn for SAA with a substantial commission, was again in breach of procurement requirements,” Steinberg said.
She said Myeni voted in favour of a R49.9-million cancellation fee for BnP, despite the fact that it did not have a valid financial service-provider licence.
Outa and Saapa claim Myeni by-passed SAA ’s treasury department in all her dealings.
“The plaintiffs will further demonstrate that these breaches involved gross abuses; gross negligence; and/or wilful misconduct. One of the excuses for awarding BnP a lucrative contract to source funds for SAA without any procurement process whatsoever, was that it was a situation of emergency, as SAA’s loans were maturing. But the emergency was created by the board,” Steinberg argued.
She said before BnP’s appointment, the national airline’s treasury department had already in June 2015 issued a request for proposals to major banks, saying the board then intervened and withdrew them. Instead of giving the tender to the banks, the board gave the tender to the Free State Development Corporation (FSDC), whose mandate was to support small enterprises (using public funds), and not fund major SOEs.
This led to Minister of Public Enterpises Pravin Gordhan’s intervention, and he stopped the deal.
BnP was awarded the tender on May 25, 2016 – the letter of appointment was dated March 20, 2016.
Steinberg further told the court that all the procurement processes were flawed. Outa and Saapa’s primary witness on the BnP capital deal is Cynthia Stimpel, former group treasurer of SAA,who was intimately involved in the SAA’s debt-restructuring plans.