OVERVIEW: 'It was shocking where SAA ended up under' Gigaba - Carolus tells #StateCaptureInquiry

2018-11-29 16:00

Former SAA chairperson Cheryl Carolus has concluded her testimony at the judicial commission of inquiry into state capture and finished off by assuring the commission of her 'unconditional support' and expressed her willingness to assist wherever she can.

Deputy Chief Justice Raymond Zondo
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Last Updated at 20:40
29 Nov 16:06

Zondo and Pretorius discuss some procedural issues, and Zondo notes that the commission will not be sitting tomorrow, when Vytjie Mentor was meant to return for cross-examination. She may only be available on Tuesday. 

Zondo adjourns proceedings until next week.


29 Nov 16:03

Zondo thanks Carolus for her time and her testimony.

Carolus says she will do whatever it takes to help the commission, and lauds Pravin Gordhan for appearing at the commission, and then also taking legal action against parties who incite violence and make false claims and thinly-veiled threats.

Carolus: "I want my country back... You have my unconditional support."

Zondo excuses Carolus for now, having earlier reminded her that she may be called back at any time. 


29 Nov 15:55

29 Nov 15:54

Zondo asks Carolus about the main differences in approach between Barbara Hogan and Gigaba, as ministers of public enterprises in relation to dealing with SAA issues or the board...

Carolus: "It was chalk and cheese. The centrality of it all is about the fact that, here were two ministers, one of whom understood, in very simple terms, the difference in the roles between shareholder, board and management. Minister Hogan would never ask the board to do something that's a management matter... 

"Minister Hogan was absolutely scrupulous, and quite simple, when you dealt with her, she raised her displeasure, and she did on occasion...you could understand immediately that she was concerned about you exercising your roles properly...

"So from a governance point of view, a huge difference. It was shocking where SAA ended up under Minister Gigaba." 


29 Nov 15:41

Carolus says the board had recommended a recapitalisation of the SAA fleet.

Carolus, now speaking on operational issues, explains how other airlines - Air Kenya and Air Ethiopia - have surpassed SAA, and jobs have been lost as a result.

She elaborates further on the decline of SAA, attributes it to "Ms Myeni's bizarre intervention" at the airline.


29 Nov 15:36

Carolus now talks about the challenges that SAA faces, with its ageing fleet of planes. She also says she is a lifelong, frequent flyer with SAA, and chooses to use SAA over flying business class with other airlines.


29 Nov 15:33

29 Nov 15:31

Carolus says that it became clear that Gigaba had "degenerated into an enabler of state capture in most of these SOEs".


29 Nov 15:17

Carolus says they wanted to leave the place in a manner that protected SAA.

"We were worried about the financial and economic consequences for SAA."


29 Nov 15:15
Following Gigaba's letter, Carolus and 7 other members resigned on September 27.

29 Nov 15:06

Carolus: He knew everything was ready.

Zondo: What's the basis on which he knew? If Gigaba lied to Speaker of Parliament, this is serious.

Gigaba writes on August 31 that they are ready, Mofmyer reads,  saying SAA would file its financial statements on that day (the day being September 31)


29 Nov 14:57

Financial statements were finalised, certified, to say that all things were in good order.

Zondo: How long before the date he wrote to the Speaker?

Carolus: We submitted it formally on 31 August, the lawful cut-off date.


29 Nov 14:52

29 Nov 14:46
Minister said he postponed AGM to allow SAA to submit records, although it had already been received. 

29 Nov 14:42
Board members wanted to resign, she tried to convince them not to because they were not implicated, term was ending in a few days.

29 Nov 14:35
Yoou couldn't be persisting as an entity without a strategy. I rolled my eyes, other board members were much more angry about it. 

29 Nov 14:31
Members of the board became concerned about ministers' utterances. Said the board had no strategy, no vision. It's factually incorrect, says Carolus. 

29 Nov 14:26
The minister was publicly saying SAA's financials were not finalised which was not true, Carlous says.

29 Nov 14:23
Company submitted all its financial statements accordingly, Carolus says.

29 Nov 14:20
SAA Books were audited without any wrongdoings, submitted on time, within lawful period. Auditors found no evidence of wrongdoings.

29 Nov 14:15

Dicussing bailout and guarantee:

This was a guarantee that SAA needed. She says the two years preceding that, SAA had made some profit. 2012 a particularly bad year. Looking at having overdraft facilities. SAA expenditure went up with R2bn. Fuel price went up to $122 a barrel. SAA flying crafts with a very fuel consumption, had 4 engines. 


29 Nov 14:10
We are back from lunch break. Carolus continues with her testimony. 

29 Nov 13:18
We adjourn for lunch.

29 Nov 13:09

29 Nov 13:06
SAA never participated in The New Age breakfast, thought it is a violation of they were authorised to spend our money on.

29 Nov 12:59

29 Nov 12:56
 The New Age did not meet the SAA  advertising criteria says Carolus.

29 Nov 12:52
One thing Mzimela established is more transparency, rigour. Making sure fairness, transparency and lawfulness was there.

29 Nov 12:51
We now move to the New Age  Newspaper and the approaches made to SAA. Carolus says she was never involved in the nitty-gritty. 

29 Nov 12:49
SAA had frequencies, they (Jet Airways) put on 7 frequencies. Both airlines then suffered because of negtaive competition. Jet abandoned route. Etihad Airways bought a stake, SAA gave up the route Mumbai. I have no indication why they gave up the route, as far as I was concerned, we kept the route growing. 80% of "bums of seats" filled.

29 Nov 12:43
Losing quite a lot of money on Botswana route. We needed government permission to close it down. They dragged their feet in it, total lack of focus and urgency. We were quite miffed about it. Least of all, the Mumbai route was the only route minister called us to discuss.

29 Nov 12:37

29 Nov 12:37
Carolus says Gigaba was quite persistent for SAA and Jet Airways to find one another. Carolus says the SAA team did not have any mandate to discuss anything outside their department.

29 Nov 12:31

Gigaba invites 2 other gentlemen to join the meeting and again Jet Airways president arrives.

Gigaba concludes the meeting by saying "can SAA and Jet Airways please find one another".


29 Nov 12:29
Carolus says Gigaba wanted to discuss the Mumbai route. Carolus confirms that this was the second time he wanted to discuss the route.  

29 Nov 12:26

Carolus: Sometimes in 2011 I then received a request that Minister Gigaba wishes to meet with us in Cape Town. 

She says she could not attend this meeting as well. 


29 Nov 12:25
No agreement was signed between Jet Airways and SAA. 

29 Nov 12:25

29 Nov 12:18

There was some histOry where SAA had collaborations which preceeded us. Jet Airways refused to pay at some point.

Spoke in disrespectful manner to Mr Mzimela.


29 Nov 12:12

Carolus tells inquiry chair that weeks after Gigaba's appointement he requested a meeting to discuss Mumbai route. She says when they met, Gigaba said he was waiting for more people. She says they waited for the people for 3 hours. 

The entire discussion was led by chairperson of Jet Airways. Gigaba did nothing, said nothing. Then Deputy Minsiter Ben Martens intervened.


29 Nov 12:10

29 Nov 12:10
Gigabe appointed November1 , in December, other than general exchanges, he asked us for specific meetings to discuss Mumbai route. I unfortunately could not attend. Instead I sent the chairperson of audit committee.

29 Nov 12:09
Board made it clear that they did not plan on closing the Mumbai route.

29 Nov 12:06

29 Nov 12:04
Someone asked to if I was I aware that the matter would be escalated to the minister by the president. I called up Hogan about the ongoing discussion, asking if she is aware of it. She confirmed her awareness. She asked if there's any truth in it.

29 Nov 12:02
Jet Airways proposing dropping the route: We said we were happy to discuss  'collaborating, not colluding, but not willing to give up the route. 

29 Nov 12:00
Establishing demand will allow them to compete. Airline margins are very tight. Between 1 and 3%. I woud never go into a sector where that's your profitability. Can't afford to have silly competition. 

29 Nov 11:59
Shortly after the tenure, head of operations suggested ddropping Mumbai route. Board thought this was inappropriate. Having four flights a week on Mumbai route was not optimal.

29 Nov 11:57
Carolus now deals with Mumbai route under Hogan's tenure  -  she now talks about how Mumbai route first came to SAA's attention.

29 Nov 11:53

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