SAA wants ex-CEO Ngqula to pay back R27m

2010-07-20 13:36

The board of SA Airways will institute action against its former CEO Khaya Ngqula who left the company in March last year.

At a media briefing today, the chairperson of the airline’s board Cheryl Carolus said this followed a forensic audit by KPMG following allegations made largely against Ngqula.

“Our attorneys have requested an interview with Mr Ngqula to seek his response to matters raised in KPMG’s reports but he stipulated conditions for the interview that were unacceptable to the SAA board, so no interview took place,” Carolus added.

“We then proceeded on the basis of the evidence.”

She said the board wanted to recover R27 million in respect of monies which Ngqula allegedly caused to be expended on sign-on retention bonuses to employees of the company without authority.

“This R27 million was in excess of the maximum financial limit and such excesses were not authorised by the board.”

The board would also seek to recover R3.3 million in respect of the hiring of hospitality suites in various sports stadiums by Ngqula.

“Against advice given to him both internally and externally, he signed these leases for suites that were seldom utilised,” Carolus said.

Furthermore, the board would force Ngqula to pay back R500 000 for free junkets that he allegedly granted to personal friends.

“He organised overseas trips for friends and associates to the 2006 Fifa World Cup, the Rugby World Cup in 2007 and the ATP Tennis Tournament in 2008.”

The law required the board to take “every reasonable step” to recover the money, Carolus added.

Summons was in the process of being served on Ngqula it was anticipated that a second summons dealing with the remaining matters would be served on him soon.

Carolus said while the KPMG forensic audit had been prompted by allegations largely against Ngqula, the outcome had shown that there were various weaknesses in SAA’s internal controls and procurement processes.

“As a consequence of this, SAA has already introduced measures to improve financial and risk management in its business,” Carolus added. 

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