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06 Jul 2018 00:00
Vuyani Jarana, brought in to make the financially distressed state airline profitable, faces a barrage of accusations from ex-senior executives. (Elizabeth Sejake/Rapport/Gallo Images)
Allegations of boardroom lies, corporate subterfuge and purges have thrust SAA, already caught in headwinds, into further turbulence.
Submissions made by a group of executives, including dismissed chief financial officer Phumeza Nhantsi, to the National Transport Movement (NTM) union include allegations of reprisals against those who opposed chief executive Vuyani Jarana.
The union is representing the executives at the Commission for Conciliation, Mediation and Arbitration (CCMA).
When Jarana joined SAA in November last year, his brief was to halt chronic losses and make the airline, which recorded a R5.6-billion loss in the past financial year, profitable.
But a trail of internal emails — part of the submissions handed to the union — show how within days or weeks of either criticising or defying Jarana’s instructions to allegedly breach SAA procurement policy, senior managers were hounded out.
Senior managers who made disclosures to the union include Nhantsi and Sonjani.
Nhantsi said they are being targeted for standing up to Jarana, whereas Sonjani, who has 11 years experience in aviation finance, believes her complaint to Jarana in April prompted her sudden termination of service.
NTM president Ephraim Mphahlele confirmed the submissions but would only say: “From where we are standing, it is clear they [SAA] are targeting senior black employees and it is particularly worrying that it is one of our own doing this.”
Without responding to specific questions sent to SAA on Tuesday, spokesperson Tlali Tlali said the board of directors were in full support of Jarana and his management team.
“We are clear that, when embarking on a journey of radical change and focusing on aggressive implementation of the strategy to turn the around the business, there will be those standing on the way of such implementation… We would like to restate that the board fully understands its fiduciary responsibilities, is committed to the enforcement of good governance and is satisfied that every decision it has taken and overseen has been in accordance with proper governance framework with due regard to policy and legislation (procurement and Public Finance Management Act among other instruments).
Without exception, all decisions taken by the current board have been in accordance with this established framework…We will continue to insist on performance and accountability from everyone and across all levels,” said Tlali.
Nhantsi and Zwane were dismissed last week, following a disciplinary hearing, for gross financial misconduct dating back to 2015 when SAA appointed unknown financier BnP Capital for R256-million to act as a transactional adviser on a R15-billion debt consolidation exercise, when it could have been done more cheaply.
An independent disciplinary hearing, chaired by advocate Nazeer Cassim SC, found the pair had failed to stand up to the then former chairperson, Dudu Myeni.
Nhantsi, a 39-year-old chartered accountant, called the dismissal disappointing and this week lodged an arbitration application with the CCMA. She would not comment on her submission to the union.
Since Jarana’s appointment, SAA has hired three consultants in chief restructuring officer Peter Davies’s office at €1 000 a day each, entered into a R25-million contract for Deutsche Bank to analyse its financials, hired eight executives with multimillion-rand salaries in Jarana’s office and appointed a security company to provide five bodyguards for two years.
Jarana cited a lack of capacity and internal resources for the spending.
But the security appointment, which was halted after media reports, was entered into without proper process, and the Deutsche Bank contract has been criticised as too much for work any accountant.
The consultants were hired from Britain to bypass a treasury instruction that they be hired after a human resources or procurement process.
SAA also recently concluded a R125-million organisational design contract with Bain & Company, which was previously flagged by procurement for being R90-million more than the second-placed bidder and that there was a possible conflict of interest.
Sonjani, who acted as chief financial officer after Nhantsi’s suspension, would not discuss her submission to the NTM, confirming only that her employment had been terminated on May 25.
Her dismissal was preceded by her demotion days after writing a heartfelt email to Jarana, finance committee chairperson Martin Kingston and Mgoduso in April.
She listed several incidents in which she alleged Jarana or his office misled or withheld critical information from her. She also alleged that the last time she had met Jarana face to face was on March 12 when he asked her to act as chief financial officer.
“There are a lot of things that happened since then that are of grave concern to me, that I feel are meant to make me appear incompetent … I do not know of a CFO [chief financial officer, acting or otherwise] who has no access to information, nor access to the CEO [chief executive officer]that they are meant to be working closely with,” she wrote.
Her baptism of fire, she said in the letter, was when she was told by a fellow finance executive about a special board meeting at which SAA’s corporate plan was to be approved, two days before it sat on March 22.
“I had not been told anything about the board meeting … I got to the meeting and found there was an agenda and pack that had not been sent to me. There were about eight items on the agenda, with my name listed as presenter on them, and I saw them for the first time at the meeting. Again, I appeared foolish before the board because information was withheld from me,” she wrote.
Other alleged cases include being given an incorrect agenda for a meeting with the finance minister, so that she was unable to contribute to the meeting, and an allegation that Jarana told the board’s finance committee, in a meeting one day after she had taken over as interim chief financial officer, that she had not done her work when in fact she had been told the work was not required for the meeting.
According to the submissions, five days after a preliminary meeting with Jarana, Mgoduso and Kingston to discuss the email, she was told by Jarana by phone that SAA had found an interim chief financial officer.
The next day, on April 12, SAA confirmed that Head would take over as interim chief financial officer, which reportedly made Mgoduso panic.
The Mail & Guardian has seen an email from Mgoduso to her board colleagues questioning how and under whose authority Head was made acting chief financial officer, instead of strategic corporate finance adviser to the chief executive, as the board had resolved.
She wrote: “When did that change and under which authority?
“What has happened to the issues raised by the acting CFO [Sonjani]?
“I asked to know what Bob’s [Head’s] KPIs [key performance areas] would be and I have received nothing yet.”
Sabelo Skiti is an investigative journalist. Read more from Sabelo Skiti
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