Treasury has Myeni in its crosshairs
The treasury, SAA’s sole shareholder, is determined to hold to account disgraced former board chairperson Dudu Myeni for allegedly masterminding a botched multibillion funding deal for the airline, for which two senior executives were dismissed this week.
Deputy Finance Minister Mondli Gungubele, whose role involves working closely with SAA, said no stone would be left unturned to hold Myeni accountable.
“In this country we must find a way to make sure that no one gets away with murder at the expense of the state,” he said.
“We have a lot of people who either ran the state recklessly or defrauded the state, who just after exiting the system, sit at home wealthy and nothing happens. I think there is a huge challenge as far as that is concerned.”
Gungubele, who is at an African Union summit in Mauritania, said he would sit down with SAA’s leaders for a briefing on issues raised in the chairperson’s report regarding Myeni.
“We want them to advise [us] what options we have in as far as those who are meant to be accountable is concerned,” he said.
“Whatever way that is legally at our disposal to deal with whoever has committed crime and is actually due to account, we will leave no stone unturned to make sure that those are made to account.
“The president has recently issued a lot of proclamations for investigations by the SIU [special investigating unit] and that is a clear message that we want to do everything to ensure that damages are paid, the losses are corrected, and those who have actually hurt the state are made to pay.”
Myeni, a close confidante of former president Jacob Zuma and chairperson of the Jacob Zuma Foundation, has served on the boards of several state institutions, including SAA and the Mhlathuze water board, where she survived numerous scandals related to meddling in operations and influencing procurement and other functions.
Many civil servants and fellow board members have detailed how she used her proximity to Zuma —even inviting board members to his home for meetings — to exert undue influence over them.
Her backroom presence in the SAA deal was brought to the fore in the disciplinary hearing findings that led to the airline’s chief financial officer, Phumeza Nhantsi, and the technical chief executive officer, Musa Zwane, being dismissed for gross misconduct. Nhantsi and Zwane appeared before a hearing chaired by Nazeer Cassim SC last week in relation to an aborted R15-billion debt consolidation deal in 2015, when SAA appointed an unknown boutique financier, BnP Capital, to source the funds in return for a R256-million fee.
The cash-strapped airline said at the time that the deal would yield interest savings of up to R500-million and allow SAA to unlock further government guarantees, allowing it to continue borrowing money to survive.
Cassim noted Myeni’s role throughout the transaction, which involved a bid to access the funds from another unknown company, Seacrest, whose funding would have come from Russia, and an attempt for SAA to get the same Russian funds from the Free State Development Corporation — a state-owned enterprise.
After then finance minister Pravin Gordhan pulled the plug on that plan, SAA’s board decided to appoint BnP as the transactional adviser.
“Having regard to objective facts of the matter, I am of the prima facie view that the then chairperson, Dudu Myeni, orchestrated the entire transaction commencing with the funding of [the] R15-billion debt for an untoward purpose.
The purpose being to involve BnP and enrich BnP and on the probabilities to share ill-gotten financial proceeds to the detriment of SAA,” Cassim said.
Media reports at the time revealed how BnP hid from SAA the fact that its registration with the Financial Services Board had been terminated — a fact that would have meant automatic disqualification.
Cassim found Nhantsi and Zwane guilty of gross dishonesty for penning a recommendation of a R49-million cancellation fee, with no basis in law, once SAA cancelled the deal.
He said the two allowed themselves to be pressured by Myeni into a deal that was clearly designed for her benefit and not SAA’s.
“On his [Zwane’s] own version, Dudu Myeni pressurised him to make a payment to BnP of monies not due to BnP. This is nothing short of theft,” Cassim continued.
“She enquired what his limit was to make the payment and to reduce the payment amount to be within his limit. He resisted, but made the recommendation to the board.”
Though SAA had also charged the two with failure to report suspected corruption to the relevant authorities dealing with economic crimes, Cassim exonerated them on the basis that SAA itself had failed to make the same report.
Both executives entered pleas of not guilty to four charges related to their involvement in the transaction.
Nhantsi, who has kept quiet throughout the suspension, said in a statement that she was “deeply disappointed” with the company’s decision to fire her and Zwane.
“Indeed, it is regrettable that the company has rushed to publicly condemn me in the face of my complete denial of wrongdoing,” she said. “The allegations against me have no foundation. At no time did I engage in conduct which I believed to be in violation of South African Airways corporate governance policies.”
Zwane issued an apology on Wednesday night, saying he took full responsibility for what happened.
“It’s important to note that I took up this position when no one in our team was prepared to risk their careers,” he said.
Cassim could not make a ruling against the two on a charge of not reporting the attempted fraud to law enforcement. “Firstly I am not informed whether SAA has in fact reported BnP to the authorities. If not, why not, bearing in mind the contention of SAA that the two accused employees were directly or indirectly advancing the interests of BnP.”