EFF STATEMENT ON NATIONAL TREASURY INTERVENTION AGAINST SAA SUSPICIOUS AND UNSUSTAINABLE DEAL
22 December 2015
The Economic Freedom Fighters (EFF) notes and welcomes the intervention by National Treasury at South African Airways (SAA), to prevent the current Board from reckless trading and probably corrupt deals. The EFF is concerned that the current Board, trusted with oversight and strategic responsibilities of the national carrier, could be allowed to conduct themselves in such an unethical and irresponsible behaviour without sanctions. Behaviour aimed at nothing but transactions and business dealings that were in the interest of few individuals at the expense of shareholders and taxpayers.
The Chairperson of the SAA Board, Dudu Myeni, who is also the Chairperson of the Jacob Zuma Foundation, which is a private fundraising arm of Mr. Zuma is incapable of leading SAA and is unaware of the basic governance operations and systems that should be adhered with in order to save the Airline from permanent crisis. All the decisions she takes and influences are aimed at privately benefiting her associates and business interests, even when such costs the state billions of Rands.
The EFF calls for immediate removal of SAA Board in its entirety for the following reasons:
1. When Mr. Zuma moved SAA from the Department of Public Enterprise in December 2014, and place it under the National Treasury when the stand-offs between the Minister of Public Enterprise Lynne Brown and the Chairwoman Dudu Myeni was getting ugly, there were agreed targets of recovery. On the first and the second quarter, the National Treasury reported that of the agreed 75 KPIs, only 34 were met and reasons provided for KPIs not met were unsatisfactory.
2. The current Board has no clue about the ins and outs of running an airline. Such that when they appeared before Parliament Standing Committee of Finance on the 2nd of September 2015, and they repeatedly said that they were not aware of any anomalies facing the national carrier and yet agreed to a turnaround strategy, which involved retrenchment of workers as part of cost saving mechanism.
To date, SAA has reduced staff by 484, a process that is on going and could see many more people lose their jobs. Again, on the 18th of November 2015, the Board admitted that management misled it when they opened the Abu Dhabi route. They claimed that management knew that the route would never make profit. To date, SAA losses R30 million per month and have lost more than R300 million for the last 10 months.
3. In absence of critical senior managers, the Board have caused instability and discord with virtually every employee of SAA. They have an acting Chief Executive Officer (COE), acting Chief Financial Officer (CFO) and the Commercial General Manager is on special leave because of internal squabbles during such a critical phase. What this means is that, all critical and important positions required to make decisions are vacant.
The EFF call on the Minister of Finance to stop the current Board from appointing CEO and CFO. The responsibility to fill senior positions at SAA must be left to the new Board that must be appointed as soon as possible. We further call on the Minister of Finance to freeze all pending contracts to avoid the current incompetent Board from making costly mistakes.
We understand the significant and meaningful role SAA is supposed to play in South Africa, in the continent and the rest of the world hence the matter to remove the current Board is urgent and we are giving the Minister of Finance until the end of the week.
Statement issued by the Economic Freedom Fighters, 22 December 2015
