Andy Duffy
Transnet has uncovered fraud and theft thought to have been costing subsidiary South African Airways’s (SAA) duty-free operation at least R5-million a year – more than 10% of the operation’s annual sales.
The group’s internal audit team paid Johannesburg-based private investigators R470 000 to undertake the six-month investigation into the operation. Its report has just been finalised.
No one has been dismissed and no criminal charges have been brought as a result of the theft and fraud uncovered.
But SAA’s duty-free sales head Andre Stewart was sacked six weeks ago after the probe uncovered an undeclared conflict of interest.
Most of the pilfering is thought to have happened at the operation’s Kempton Park headquarters, though some took place on board SAA flights.
SAA sources say such pilfering is common to airlines worldwide, but that the level in SAA was comparatively high. Management is now discussing plans to tighten controls over the business.
Transnet has also recruited independent investigators from accounting firm KPMG to probe procurement irregularities in its Portnet division.
The investigation is at an early stage and is expected to run for some months. But one procurement manager and his assistant have already been suspended, and more suspensions are expected.
It is thought the losses run to more than R10-million. Several of Portnet’s major suppliers are involved in the investigation.