By Jessica Bezuidenhout

They had stalled and blocked her at every turn, but former SAA treasurer Cynthia Stimpel was relentless in her efforts to stop a R15bn cash-raising deal from being pulled off outside of due process – and with the help of a transaction adviser for R300m – while South African banks could do it cheaper.

The national carrier was embroiled in a massive scandal around this deal in 2016, and on Thursday 13 June 2019 the State Capture Commission heard how Stimpel, during a walking pilgrimage in France over Easter that year, got word from a colleague that BnP Capital, initially recommended as a transaction adviser at a fee of R2.6m for the deal, would now also be sourcing the loan for SAA.

Deeply disturbed, she went to a coffee shop to access Wi-Fi and wrote to Treasury officials:

“This is a WhatsApp whistleblowing message. I don’t know how else to do it.”

Stimpel continued by writing that she had just received notice that a bid-adjudication document had been signed to install BnP Capital as a transaction adviser in the debt-raising deal, that the company was initially meant to provide only advisory services at a fee of R2.6m, but that the contract has now been changed to allow BnP to rake in R300m.

She sent the officials another message shortly before midnight, correcting the figure – it was actually R225m – and informed them that her deputy had signed the recommendation. He said he had been put under pressure.

Stimpel’s message was the culmination of more than a year of back-and-forth on the mission to raise the R15bn to consolidate the company’s debt.

Initially, seven bidders, including three major banks, had pitched for the job. An unknown entity called Seacrest Investments 115 Pty Ltd, a company with no discernible assets, was recommended.

However, the deal with Seacrest couldn’t continue because the due diligence found that it had no funding and was to rely on an unknown Russian entity called Grissag to source the funds.

The involvement of Grissag did not end once Seacrest was out of the picture because the Free State Development Corporation (FDC) then stepped in to aid SAA – also intending to source the cash via the unknown Russian company.

Stimpel again pushed back once she realised the common link to Grissag.

She said this was because there was no information on the company and she had no way of knowing where they would get the money from it to lend to SAA, and importantly, whether the cash would be “kosher”.

But while Stimpel kept insisting the deal be put out to tender again, the then SAA board allegedly tasked former acting CEO Musa Zwane and the then acting CFO, Phumeza Nhantsi, to take “urgent” steps to negotiate, execute and sign the now R14bn loan offer from FDC.

The Commission heard that the board saw fit to issue this instruction for the R14bn offer from the FDC based solely on a letter, one that contained no amount, and which specifically stated that it was not a commitment.

Stimpel suggested the Commission consider the constitution of the board at the time – former chairperson Dudu Myeni, Yakhe Kwinana and John Tambi – with Zwane and Nhantsi in attendance.

Several months passed and she could not get feedback on progress until Nhantsi later told her the FDC was no longer in play, and that SAA would instead appoint a transaction adviser to advise it on a range of issues, including the restructuring of its debt portfolio.

Stimpel believes that some members of the executive and the board deliberately stalled or rejected some of the earlier formal bids to create a crisis that allowed for the appointment of BNP Capital on an emergency basis at the last minute.

She had cautioned against changing the scope of the contract for BNP to provide advisory services only and insisted SAA put out a request for proposals to the market instead.

But, on 21 April 2016, the board resolved to extend the scope of the deal to include both advisory services and sourcing of the funds.

Stimpel says on 6 May she was called into Nhantsi’s office where she was told that the board had approved the revised scope. She was shown a document stating the company would charge R300m.

She told Nhantsi: “Phumeza, I’m not signing this. I am tasked with saving R300-million for the organisation by year-end and the only way is to reduce interest on our borrowings and now you’re going to wipe all that out with one transaction.”

“I told her I will go out to the banks because I knew they wouldn’t charge us that [much].”

Nhantsi allegedly didn’t engage her further, saying she had to leave because then-president Jacob Zuma was visiting SAA that day.

Before going on leave, Stimpel says she told SAA acting group treasurer Michael Kleyn what had transpired and asked him to ensure the bid adjudication document was not signed until she returned from France.

But on 13 May, Kleyn, allegedly under pressure, signed the document paving the way for the recommendation of BNP’s appointment to make its way to the board for approval.

Back from leave, on 17 May, Stimpel snapped into action and contacted three banks to get hypothetical quotes for the same service.

She emailed Nhantsi on 20 May, still hoping to block the expensive deal, and informed her that they could get it done for as little as R85m from one of the banks she had approached.

And, said Stimpel, she urged Nhantsi to reconsider the BnP appointment, and again suggested a request for proposals to go out – she told Nhantsi this was to ensure that SAA’s best interests were served.

Unbeknown to Stimpel, Nhantsi had gone to the board anyway and a round-robin resolution approving BNP’s appointment as transaction adviser was secured on 24 May.

The aviation stream of the inquiry has resulted in 69 notices being issued to implicated parties and so far only Nhantsi and Zwane have applied to cross-examine Stimpel.

Five enabling factors of State Capture

In addition to the rotten antics at the national carrier, SA Express, the Industrial Development Corporation, arms of the Free State and North West governments and the Airports Company of SA will also come under the microscope, mainly as a result of deals involving SAA.

The Commission’s advocate, Kate Hofmeyr, announced that upcoming testimony will show how ministers, boards of state-owned companies, funding institutions, private companies and the Hawks were among the five key enablers of State Capture across the aviation sector. The Commission, Hofmeyr said, will hear:

• How priority crime investigations stalled for unreasonable long periods and that work performed on some criminal cases does not stack up to the required due diligence;

• How some companies had allowed themselves to be used to hide the proceeds of crime; and

• That funding institutions, such as the IDC, had allegedly failed to be rigorous in their funding decisions.

The Commission, Hofmeyr said, will also hear how Cabinet members responsible for the Department of Public Enterprises had retained members of boards in their positions despite sustained evidence of non-compliance with their fiduciary duties.

And, how “ministries” failed to act on whistle-blower reports – leaving it up to cash-challenged civic organisations to step in. This is particularly relevant to Stimpel’s case as her WhatsApp plea to National Treasury officials had seemingly fallen on deaf ears, prompting her to reach out to a civic organization, Outa. DM