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Johannesburg - Civil rights body Outa presented proof on Friday that BnP Capital, which has a contract with South African Airways (SAA), had its Financial Services Board (FSB) licence revoked.
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"We have learnt that the FSB licence of BnP Capital has been suspended," said Outa director of legal affairs Advocate Ivan Herselman.
BnP Capital, which is allegedly not trading from its registered address, was suspended for "serious transgressions", said Herselman.
He was speaking at Outa's press conference in Johannesburg, a day after Outa said it planned to interdict the contract between SAA and BnP Capital, and will take further litigation procedures against SAA board members.
The FSB on Friday confirm this, saying the "licence was suspended for non-compliance with Section 8A of the Financial Advisory and Intermediary Services Act".
This follows reports that the appointment of BnP Capital Services by South African Airways did not follow the correct procurement procedure.
Outa wants SAA and BnP Capital to walk away from the deal. "Our understanding is that even though a letter has been given to BnP Capital, the agreement has not been signed," said Herselman.
"As according to the critical criteria, they no longer comply," he said. "We only learnt of the (FSB) suspension late last night."
Outa called for the SAA board to step down. "They are using SAA (and) positioning people that are favourable to them," he said. "They are removing all the financial controls."
Outa wants to know more about Inline Trading, which is BnP Capital's trading partner. It also wants to know why BnP Capital only had white directors previously, but then got a black director on 5 February this year.
Wayne Duvenage (left), chairperson of the Organisation Undoing Tax Abuse (Outa), and Outa director of legal affairs Advocate Ivan Herselman at the press briefing on Friday. Photo: Gareth van Zyl.
BnP Capital shareholders could earn R256m
In a telephonic interview with Fin24 on Thursday, Wayne Duvenage, chairperson of the Organisation Undoing Tax Abuse (Outa), said that the organisation will be looking to stop the conclusion of the agreement, which could see BnP Capital shareholders earning R256m.
According to a statement by Outa, SAA could have sourced these services for one fifth of the cost, for anything between R42m and R85m.
Duvenage said at the briefing on Friday Outa has sent SAA a letter of demand, asking not to undertake the transaction.
In an emailed response to questions about the procurement procedure, SAA spokesperson Tlali Tlali, confirmed to Fin24 on Thursday that BnP Capital was appointed by SAA to act as Transactional Advisor and "that appointment conformed to prescribed procurement processes".
"SAA is satisfied that it applied its mind and took into account all relevant and/or material factors before making its decision. We are confident that the process followed was compliant with governance framework.”
BnP Capital could not be reached for comment.
Long-term plans
Outa also called for the SAA board to step down.
"They are using SAA, positioning people that are favourable to them. They are removing all the financial controls," said Herselman.
“The medium to long-term plan is to carry out litigation against various members of the SAA board,” said Duvenage. This will cover gross violations such as the Airbus deal which came to light last year and most importantly the loss of critical leadership.
“Directors are not acting in the best interests of SAA,” he said. Referring to dismissals and suspensions of individuals in the past, he said: “These people are suspended simply because they question behaviour of the board."
SAA can’t continue like this
On Friday, Duvenage said the situation "can’t continue like this".
"The airline is in bad shape,” he added. "You see at SAA, talented people... other people who are asking serious questions become sidelined and suspended. This organisation is 82 years old (and) it is a well-known brand around the world.
"This airline shouldn't be running at a loss," he said. "There is no reason for SAA to lose its talent."
Outa, which has a secure whistle-blowing platform, is focusing its attention on allegations of tax abuse with regards to Sanral's e-tolls, SAA and Eskom.
"We need to applaud the whistle-blowers," he said. "We need to applaud whistle-blowing and make it more affordable."
Herselman said Outa will complain about the matter to the Public Protector, but haven't done so yet. "The Public Protector is inundated with work," he said. "We will provide our work to the public protector."
LEGAL LETTER: Read the letter that Outa sent SAA
