Gigaba pressured SAA to drop route
STATE CAPTURE: FORMER SAA BOARD CHAIR TESTIFIES
‘As a shareholder you can’t help another company at the expense of your own.’
During his tenure as minister for public enterprises, Malusi Gigaba put pressure on South African Airways (SAA) to make a deal with Jet Airways aimed at getting SAA to relinquish the Johannesburg-Mumbai route, the Commission of Inquiry into State Capture heard yesterday.
In her testimony, former SAA chairperson Cheryl Carolus, who was on the board from 2009 to 2012, said: “The first thing Gigaba did after being appointed to the public enterprises portfolio was to call a meeting to discuss the Mumbai route. I sent CEO Siza Mzimela and the board’s head of audit to explain our approach and they reported back to me.
“Gigaba made the SAA team wait for three hours for unidentified people who were going to be part of the meeting. Later, two Indian gentlemen walked in, one of whom happened to be Jet Airways founder and chair Naresh Goyal.”
Carolus said Gigaba took a back seat, allowing Jet Airways to drive the discussion. “The Jet Airways executives were disrespectful to Mzimela. They wanted SAA to terminate the route. Only deputy minister Ben Martins supported the SAA team, saying the Indian delegation had no business in the SAA Mumbai route.”
Carolus said there were four flights a week on the route and it was important as a growing network route for the east-west corridor expansion to service India, Africa and South America.
“No one had the connectivity we had, as Mumbai was marketed as a package. The strategy was to bring more people to SA using a hub strategy with many spin-offs for business and the economy.”
The route had the potential for growth and Jet Airways was aggressively trying to get SAA to drop it, with Gigaba’s backing.
“Jet Airways made several attempts to get the board to succumb, then said they would escalate the matter to the minister. As Mumbai was a network route, our strategy was not to close it.”
On April 11, 2011, Gigaba called another meeting with SAA executives, which Mzimela and a board member attended.
“It was the second meeting on Mumbai with the minister at which his legal advisor, Siyabonga Mahlangu, berated Mzimela for not closing the route, claiming it wasted money. Again, two Jet Airways executives led by Goyal walked in.
“Mzimela said there could be no decision until due process had taken place. Gigaba said SAA and Jet Airways should find each other on the Mumbai question, which was peculiar.
“As a shareholder you cannot help another company at the expense of your own. It was clear he wanted us to help Jet Airways,” said Carolus.
Gigaba gave the route to Jet Airways when the Carolus-led board’s term ended.