Chairperson Myeni can save SAA by resigning
13 September 2016
Note to editors: The following speech was delivered by the DA Shadow Deputy Minister of Finance, Alf Lees MP, during a debate in the National Assembly on placing state-owned airliner, SAA, under administration.
Madam Speaker,
In his budget speech in February the Minister of Finance laid out three things that he required of SAA, one of these was a strengthening of the board. This objective has not been achieved?
In the interim Dudu Myeni has received public support from President Zuma and Minister Gordhan has been forced to accept a compromise that retains her as board chair. This is a classic “devil’s bargain” where Minister Gordhan has agreed to retain Dudu Myeni on the SAA board and in return gets something that he really does not want. He gets a new board that is destined never to meet the conditions that he has laid out for it.
This “devils bargain” is not in the interests of the Airline, nor in the interests of South Africa.
We are dealing with a corporate warlord who takes over as the chief executive and whose only interest is enrichment of herself, her family and her close cronies.
This view is not restricted to her performance at SAA but is mirrored at Mhlathuze Water where in court papers she is described as “tyrannical”. In an affidavit to court Sibusiso Makhanya, former Mhlathuze CEO, states that he was told by Dudu Myeni that he was under investigation because;
“Ukuthi wena Makhana awungidlisi, kanti abanye oCEO bayabadlisa o chairperson babo”
“It is because you Makhanya, are not feeding me, where as other CEO’s feed their chairpersons”.
Madam Speaker as an example of Dudu Myeni’s corporate warlord campaign of tyranny we have heard from a reliable source what happens at meetings that she chairs.
She has two armed bodyguards with her at all times, even inside closed board meetings! When participants arrive at meetings She instructs her bodyguards to confiscate all laptops, iPads and cell phones and these are then removed from the room probably for inspection and checking of contents.
At the end of a meeting the bodyguards confiscate all notes that anyone has made during the meeting and these notes are handed to Dudu Myeni to keep and to read at her leisure.
If I were a betting man I would certainly bet on one or more of the new serious directors identified by Minister Gordhan soon resigning rather than to waste their time being bullied by corporate warlord Dudu Myeni.
It is disingenuous to argue that Dudu Myeni only has one year in office. The situation at SAA needs robust attention now not in a year’s time.
The international ratings agencies will be looking very closely at how SOE’s, such as SAA, are handled when they do their assessment for the next round of sovereign credit ratings later this year. SAA must be seen to be under control and on a path to recovery.
In 2013, the year Dudu Myeni became board chair, the SAA loss was R 1,2 billion and 2014 saw a loss of R 2,59 billion.
A leaked copy of the 2015 income statement reflects a R 4,67 billion loss. In 2016 Dudu Myeni herself has indicated that a loss of R 4,0 billion is likely and leaked information indicates that there was a loss of R 1,3 billion in the first quarter of 2017. The losses just continue to pile up year after year.
The losses of R 13,7 billion over the past four and a quarter years if paid as child grants instead of being wasted could have added an extra R 100 per month for every one of the 11,7 million child grants for a year.
According to National Treasury SAA is technically insolvent and according to CFO Wolf Meyer in his leaked Airbus memo that ultimately cost him his job, SAA is on the brink of liquidation.
This danger of liquidation was confirmed by Dudu Myeni’s close friend and Audit Committee Chair Kwinana when she resigned as a director in August 2016.
If nothing is done SAA would undoubtedly be forced into liquidation and become a massive, R 14,4 billion blow to the taxpayer who would have to carry the burden of meeting the, soon to be R 19,4 billion, government guarantees that have been issued in favour of SAA.
Should these guarantees be called in it would amount to Pravin Gordhan reaching into your back pocket and taking R 2 771,00 from each and every personal income taxpayer.
The Minister and the Cabinet have chosen a business rescue that includes Dudu Myeni in charge of a new board. She will continue to be the corporate warlord as that is all she knows and in the end she and her cronies will benefit but South Africans will be the losers. The DA maintains its position that the re-appointment of Dudu Myeni as SAA board chair was irrational and we will persist with our court review application.
If she had the interests of SAA at heart Dudu Myeni would already have resigned.
Issued by the DA, 13 September 2016
