THE South African cabinet on Wednesday defused a political row over the multi-million dollar salary paid to the former head of South African Airlines (SAA).
It admitted that there had been irregularities in negotiating US national Coleman Andrews’ pay package but said both government and the former boss of the airline’s parent company Transnet had “acted in good faith”.
Weeks of bitter fighting had divided cabinet ministers over whether it was fitting for former SAA chief executive Andrews to have been paid R232-million ($28-million) for 22 months of work and who authorised his salary.
It began when Public Enterprises Minister Jeff Radebe accused former Transnet boss Saki Macozoma of bypassing the board and negotiating Andrews’ salary without having the authority to do so.
Macozoma, a fellow senior official of the African National Congress, shot back that the Transnet board was “leaking like a sieve” and could not be trusted with the details of Andrews’ deal.
Cabinet Wednesday vindicated Radebe, saying in a statement: “It is clear there were irregularities in the process that led to Mr Andrews’ appointment.
“It is possible that a different final remuneration package would have been accrued to Mr Andrews if the process had been better managed.”
While absolving Macozoma, the cabinet signalled that it was unhappy with the way the Transnet board had managed the process and said changes would be made to “strengthen” it.
The statement comes days after President Thabo Mbeki called for an end to the Andrews matter, which he termed an “unseemly squabble”.
Andrews has been credited with turning SAA into a profitable business.
The airline had shown annual losses of R280-million ($35-million) when he joined in 1998, but made a profit of R9,6-million the following year.
In 2000 it reported a profit of R349-million, but critics have charged that this was not sustainable profit but the result of asset-stripping.
Andrews resigned in March, 14 months before his contract was due to expire, and later cited political interference from Radebe.
He last week warned that the damage done by the controversy could discourage foreign investors and derail SAA’s proposed listing next year. – AFP
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FEATURE:
Mbeki upset over squabbles June 22, 2001