DA wants reasons for SAA suspension

By Drum Digital
12 February 2013

Public Enterprises Minister Malusi Gigaba must explain in detail the reasons for the suspension of SA Airways acting chief executive Vuyisile Kona, the DA said on Tuesday.

"It is concerning that this is SAA's third CEO since 2009. The manner in which Mr Kona has parted ways with the airline is equally troubling," Democratic Alliance spokeswoman Natasha Michael said in a statement.

"The reasons for his ousting appear to be clouded in uncertainty, with no substantive explanation forthcoming from either the board or minister Gigaba."

SAA on Monday evening announced Kona had been placed on precautionary suspension with immediate effect. This was based on allegations that had come to the board's attention, and it had a fiduciary duty to investigate, the company said.

The board had asked Mango CEO Nico Bezuidenhout to oversee the group's operations in the meantime.

Over the years, SAA has had to ask for several bailouts from government because of its precarious finances. In the most recent one, in January this year, it received a R550 million bank "facility" to cover fuel and other short-term commitments, the Sunday Times reported.

A number of SAA board members, including chairwoman Cheryl Carolus, unexpectedly quit last year before the annual general meeting in October, when their term was due to end.

At the national carrier's AGM, it reported a R1.3 billion operating loss for the year. The airline's losses over the past decade amounted to R14.7 billion.

In early October, the National Treasury announced SAA had been given a R5 billion government guarantee to recapitalise. This would enable it to borrow from financial markets and buy new aircraft.

Gigaba's spokesman Mayihlome Tshwete, on Tuesday said the reasons for Kona's suspension could not yet be disclosed.

"This decision was taken by the board... and they would prefer not to communicate on some of those points at this stage. Such a decision could not have been an easy one. The company is facing a difficult time."

Tshwete said Gigaba would assess and monitor the situation and intervene when needed.

"We respect the difficult decision that the board had to make. We will assess it and make further intervention. Our focus is the well-being of the company and the employees, and the well-being of the economy."

Michael said it was unacceptable for SAA's board to offer no explanation for its decision. The company was a public entity funded in part by public funds.

"How can Parliament hold the executive accountable for its decisions if they are kept in the dark? Transparency appears to have gone out the window," she said.

"As the member of the executive ultimately responsible for appointing SAA's CEO, minister Gigaba owes South Africans a detailed explanation for Mr Kona's suspension."

Tshwete said while SAA's financial situation was not secret, matters had to be dealt with sensitively.

"SAA is going to have to be kept operationally stable. We must enable it to go to financial markets and speak to institutions and borrow money," he said.

"It doesn't assist us now to get into a mud-slinging match."


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