Former exec stands by one decision regarding BnP's role at SAA, inquiry hears

Phumeza Nhantsi, a former chief financial officer of South African Airways, told the judicial commission of inquiry into state capture on Tuesday that, knowing what she knows today, she still stands by one of the decisions made regarding the role of BnP Capital in raising for the state-owned airline.

The inquiry has been investigating allegations of state capture, corruption and fraud at state entities since August 2016. Last week it turned its attention to the national flag carrier.

Nhantsi testified that, although she supported all the decisions regarding BnP at the time, she now has serious concerns about them. The sole decision she still supports is appointing BnP Capital as transaction advisors for a R15bn debt restructuring loan agreement that SAA was seeking to conclude in 2016. 

The first decision Nhantsi was asked about on Tuesday was taken by the airline's board in December 2015 to appoint the little-known Free State Development Corporation as a potential funder of billions of rand urgently needed by SAA. The board sent Nhantsi a letter to conclude the deal.

When asked if, knowing what she knows today, she still supports the decision, Nhantsi said "yes and no".

"If the company continued with the transaction at the time, it would have saved interest, but looking in detail now and analysing it in detail, it looks that there were previous discussions and that there was already a potential foreign (funder)," said Nhantsi. "I was just 3 or 4 days in the office (of SAA CFO) then. So, today I say that perhaps there were people who stood to benefit from the transaction and using me to conclude it."

The next decision Nhantsi was asked about was to appoint BnP Capital as a transaction advisor for the R15bn loan agreement. To this Nhantsi answered that she still supports this decision by the board.

The third decision Nhantsi was asked about was one to extend the scope of BnP from a transaction advisor to source the funds for SAA. Nhantsi said she no longer supports the decision.

She also indicated that she never supported a decision to approve a request for a cancellation fee for BnP Capital in terms of its extended scope.

To this it was put to Nhantsi that the commission has a letter she wrote in support of payment of the cancellation fee. It was indicated that she will be asked about this during further proceedings of the commission.

Nhantsi was suspended in March 2018. 

In June 2016, SAA had terminated its contract with BnP Capital in the wake of law firm Webber Wentzel threatening it with court action. The Financial Services Board, the forerunner of the Financial Sector Conduct Authority, said BnP did not at the time have a license to operate as a financial services provider. 

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