Business

Dark clouds hang over SAA

Lisa Steyn

It is just six weeks into 2013 and it appears that it will be another turbulent year for SAA.

Vuyisile Kona of SAA (Business Day)

Its acting chief executive has been suspended amid allegations of tender irregularities.

This week it was announced that Vuyisile Kona, acting chief executive of the troubled airline, was placed on precautionary suspension in light of allegations that he contravened the Public Finance Management Act in relation to the engagement of some service providers.

An industry source, who asked not to be named, said Kona was offered a settlement to leave the organisation but he rejected it.

When this was put to the airline, SAA said: "The ­circumstances surrounding the placement of Mr Kona on precautionary suspension by the airline fall within the normal employer/employee relationship as provided for in terms of the labour laws. Based on this, SAA is not at ­liberty, at least at this stage, to get into the details of the matter as this may be prejudicial to either party, considering that the issues are still to be ­interrogated fully until the outcomes are known."

Kona told Business Day this week that he would not resign until the airline's board had proven the allegations against him.

He vacated his role as SAA's group vice-president for subsidiaries in 2005 after he was promised a R4.7-million exit package – although he had to take the airline to court for R3.3-million of it. He returned to the organisation five months ago as chairperson of the airline's board and was appointed as acting chief executive two months ago.

The airline graced news headlines for all the wrong reasons last year, with an operating loss of R1.3-billion reported for the past financial year, followed by a R5-billion bailout from the government in October amid criticism from other airlines that it was engaging in anti-competitive practices that led to the folding of budget carrier 1time Airline. SAA also had to secure R550-million to cover its operations during the festive season.

The former chief executive, Siza Mzimela, resigned in October last year, following in the footsteps of the airline's chairperson and six other board members.

Eyewitness News reported Kona was under fire for allegedly going over the heads of his superiors and complaining to President Jacob Zuma about the SAA board. The presidency did not respond to questions from the Mail & Guardian about this. Eyewitness News also reported a source close to the airline said that Kona had incurred the wrath of the board for negotiating long-term fuel deals that he was not supposed to do in his acting capacity.

Several sources have also suggested to the M&G that the allegations Kona faces may also be related to a deal relating to other service providers as well as some questionable managerial decisions.

"We are investigating, we have people on the ground, and we will soon uncover the issues," said Vin­cent Masoga, spokesperson for the South African Transport and Allied Workers Union. He said the union understood that the allegations related to oil tenders and other supply issues, and that Kona had apparently sidelined senior managers, which "definitely shows somebody has an agenda".

In a statement issued this week, the union accused Kona of, among other things, the isolation of all SAA stakeholders on important ­governance issues that required oversight, as well as a propensity to convene private caucuses with antagonistic sections of workers, worker leaders, managers, politicians and business people.

It also said he had sidelined senior managers and appointed his friends and cronies in strategic positions.

Masoga said that union members on the ground reported that people who were responsible for industrial relations and other human resources were sidelined and, in other cases, positions were created by Kona for his cronies.

Masoga said Kona's comments in the media showed he was "desperately trying to appear tough, to get people to support him".

On February 13, the portfolio committee on public enterprises said it noted, with concern, the suspension of the acting chief executive. The chairperson of the committee, Peter Maluleka, said the committee was not at all surprised with the latest developments at SAA.

Maluleka said the governance problems of SAA had affected the execution of a turnaround strategy — "but we have full confidence in the board and the minister of public enterprises that they will bring about stability in the entity".

SAA has been invited to brief the committee on its annual report and financial statements on February 19.

Meanwhile, the board said it was in the process of recruiting a permanent chief executive and was confident that would be completed by the end of March, when recommendations would be presented to the minister of public enterprises.

In the meantime, Mango airlines chief executive, Nico Bezuidenhout, has been appointed acting chief executive of SAA. Kona did not respond to the M&G's requests for comment.


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