Gordhan sparks Myeni feud – SAA needs a board ‘clear out’

Talk can keep you afloat for so long but eventually action is required. And Finance Minister Pravin Gordhan’s statement that South African Airways needs a whole new board is welcome but it’s a common fact that he’s been at loggerheads with chair Dudu Myeni since his return to the office. And it may well be Myeni’s close relationship to President Jacob Zuma that makes this type of call a lot more difficult to implement. Gordhan has the authority to fire Myeni, and given the Quartile and BnP allegations, the decision to is a simple one. And for South Africans, given the R14 billion of taxpayer funds that have already been barrelled down the state-owned airline, change is a necessity. – Stuart Lowman

By Lameez Omarjee and Matthew le Cordeur

Cape Town – Finance Minister Pravin Gordhan said South African Airways (SAA) requires a whole new board on Tuesday.

Speaking at the EY and Johannesburg Chamber of Commerce and Industry (JCCI) business breakfast in Sandton on Tuesday, Gordhan said SAA needs an an experienced management team.

In response to a question posed by investigator Paul O’Sullivan about quelling corruption at SAA, Gordhan said the new board and management team could include existing members and “new blood”.

Pravin Gordhan, South Africa's finance minister, speaks during an interview in London, U.K., on Thursday, Mar. 4, 2010. Gordhan said he is “disappointed” by the response of developed countries to the government’s plan to seek about $4 billion in loans from the World Bank. Photographer: Chris Ratcliffe/Bloomberg*** Local Caption *** Pravin Gordhan
South Africa’s finance minister Pravin Gordhan.

A turnaround strategy should be implemented for the airline to be able to continue.

“We will continue to find answers to the challenges at the moment,” he said.

“We must do political homework to get credible people on board.”

People with the right skills balance can take the airline’s development upward, he said.

His statement comes as the stalemate between Gordhan and SAA board chairperson Dudu Myeni is rapidly driving SAA to total collapse, according the Democratic Alliance on Monday.

This has resulted in Gordhan requesting extensions of the deadline for tabling of SAA’s annual report for 2014/15 on 15 February, 15 March, 29 April and yet again on 7 July – this time to 15 September 2016.

SAA has received a number of government bailouts worth at least R14.4bn as part of its turnaround strategy, but Gordhan warned in January the carrier cannot become a liability on the fiscus.

O’Sullivan is under investigation by the Hawks following his probe into SAA. He told BizNews in July how he uncovered the recent BnP Capital saga, which was formally exposed by Outa recently.

“I’ve got no doubt whatsoever that the appointment of BnP Capital is nefarious, it’s unlawful and it’s criminal and everybody that signed documents permitting it to take place should be held criminally liable,” he told BizNews.

SAA on Thursday announced it has decided to terminate the services of BnP Capital as both transaction adviser and its appointment to source funds on behalf of the airline.

Myeni has been at the centre of various allegations of poor governance, from the Airbus swap deal that caught former Finance Minister Nhlanhla Nene in a tangle to the recent BnP Capital saga, where SAA has been forced to cut ties over a R256m deal due to legal proceedings by Outa.

Gordhan told BDLive he had not had an opportunity to get into the “full details of the R256m and its cancellation and alleged cancellation fee” but he would be looking into it.

If any non-compliance with the Public Finance Management Act was found to have occurred, steps would be taken, the minister said.

Myeni’s close friendship to President Jacob Zuma could make any decision Gordhan wants to make a little more difficult.

The Sunday Times reported in February that Gordhan was determined to remove Myeni from the airline’s board.

The minister of finance has the power to appoint and remove board members since executive authority over SAA was transferred to the treasury in December 2014.

These powers are outlined in the SAA Act, Public Finance Management Act (PFMA) and Companies Act.

The Sunday Times reported that Gordhan allegedly informed Zuma about axing Myeni.

According to a source, Zuma ignored Gordhan, forcing him to repeat his intentions. “This time the president simply responded that he had heard him. He never said yes or no, or asked why,” reported the Sunday newspaper.

Since then, Gordhan has been through a torrid period with the Zuma-friendly Hawks, who sent him questions regarding an intelligence unit at Sars that was started when he was commissioner.

Eventually, after months of political unease ahead of the ratings downgrade countdown, the Hawks said in May it was not planning on charging Gordhan. In the same month, Zuma visited the SAA head office, where he promised the state-owned company would not be privatised.

Since then, the heat has been off the finance minister, who managed to persuade the ratings agencies in June not to downgrade the country to junk status. In addition, it would appear the heat has been off Myeni too.

The state capture narrative might return after the local government elections, some analysts believe, which might see the battle for SAA’s soul intensify. – Fin24

Source: http://www.fin24.com/Companies/Industrial/saa-requires-a-whole-new-board-gordhan-20160726

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