Myeni's time at SAA running out as broke airline gets another bailout | Fin24

Myeni's time at SAA running out as broke airline gets another bailout

Jul 03 2017 08:04
Matthew le Cordeur

Cape Town – Parliament’s standing committee on finance chairperson Yunus Carrim has called for a review of the South African Airlines (SAA) chairperson position following yet another multi-billion rand bailout.

This follows the announcement by Treasury on Saturday that SAA will receive a R2.2bn bailout to repay its debt to Standard Chartered Bank to avoid defaulting.

The bailout has added more pressure on embattled SAA board chairperson Dudu Myeni, after the Companies Tribunal last week dismissed her application to have a compliance notice issued by the Companies and Intellectual Properties Commission set aside.

This ruling will “add weight” to a court application by the Organisation Undoing Tax Abuse (OUTA) to have Myeni declared a delinquent director.

Finance Minister Malusi Gigaba hinted that Myeni’s role at SAA could come to an end at the airline’s annual general meeting this year.  “At the upcoming AGM, we will attend to the matter of appointing her successor,” he told media in June.

Adding more pressure, Carrim said in a statement on Sunday that the committee wants "the position of the board chair (to) be reviewed".

He also called on the board to be strengthened with "people with the necessary aviation expertise and experience" and that a chief executive be appointed as soon as possible.

“Government should appoint the best person available for the post. The SAA management as a whole has to be considerably strengthened.”

Treasury has failed oversight role - Carrim

Carrim also blamed Treasury for failing its oversight role of SAA.

“We believe that Treasury is failing in its oversight role of SAA, and we are going to be far more effective in our oversight role over Treasury and the SAA,” he said.

“We are to meet with them in early August when Parliament reconvenes and again in September. We are especially concerned that SAA has been losing R370m a month at the moment.

“The finance committee will want to know what exactly Treasury is going to require from the SAA board in return to ensure that it functions far more effectively.”

His views echo those of committee member Democratic Alliance MP Alf Lees, who said it was a “blow to the credibility of both the SAA board and to National Treasury”.

“This emergency funding for SAA indicates the serious crisis that SAA has been mismanaged into,” he said  in a statement on Saturday. “This taxpayer bailout makes no difference to the cash crisis at SAA.”

Government had no choice but to give SAA bailout - Carrim

Carrim said government had “no choice but to bail SAA out”.

“Not to have done so would have been far worse, not just for SAA, but the country as a whole,” he said. “In any case, the government has for some while now been considering a capital injection into SAA. The need to repay the Standard Chartered Bank loan prompted this decision sooner.”

Carrim said the committee will want the board’s turnaround strategy to be finalised as soon as possible and brought to the committee.

“While the majority in our committee does not support the privatisation of SAA, we believe that there are a variety of other ways to ensure effective private sector participation in SAA, and we urge Treasury and SAA to finalise their proposals on this.

“The committee does not have the forensic and other capacities to investigate allegations and counter-allegations of corruption within SAA and we urge that these be referred to the police and that the criminal justice system acts swiftly on these matters.”



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