Cape Town – Finance Minister Pravin Gordhan has reportedly conceded defeat to President Jacob Zuma as Treasury reportedly included South African Airways (SAA) chairperson Dudu Myeni in its board recommendations to Cabinet on Wednesday.
Having allegedly failed to get Zuma’s approval for a board without the controversial chair at the helm, Treasury has conceded defeat, according to a report in the Business Day on Thursday.
Myeni, chair of the Jacob Zuma Foundation, is a close friend of the president and has allegedly been sheltered by the top boss in a tenure that has seen the national carrier face countless challenges.
Myeni has been chair since 2009 and can only serve three three-year terms, a person citing legislation told Business Day. That means she would likely not be able to serve beyond 2018.
The announcement of the new board is expected on Friday, after Cabinet ratifies the recommendations of 12 board members.
By having the board in place by Friday, Treasury will release the R5bn guarantee and SAA will be able to finalise its report by September 6. While SAA’s latest saga seems likely to be resolved, the state-owned company's reformers will have lost a major battle.
“Included in the list submitted to the Cabinet is Mzimkulu Malunga, the former MD of Business Day and Financial Mail, MK veteran and former ANC MP Peter Maluleka, attorney Peter Tshisevhe, economist Nazmeera Moola and Stavros Nicolaou, a senior executive in the pharmaceutical industry,” Business Day revealed.
“Other nominees include Akhtar Moosa, Gugu Sepamla, Swazi Tshabalala, Martha Mbatha, Siphile Buthelezi and Thandeka Mgoduso.”
Gordhan said a “good announcement” regarding SAA can be expected “shortly” last Wednesday.
The minister, who heads up the state-owned company, has been withholding a R5bn guarantee as a carrot for the ailing national carrier to reform.
Myeni has overseen the financial demise of the airline, with SAA seeing countless CEOs come and go during her tenure. She has also seen a few ministers pack their bags.
Gordhan’s efforts to reform state-owned companies like SAA, Eskom and Denel are being complicated by the Hawks' threat of arrest over an investigation unit established at the South African Revenue Service (Sars) when he was commissioner from 1999 to 2009. The Hawks are trying to pin corruption charges on Gordhan regarding the retirement plan of former Sars head Ivan Pillay.
His reforms are crucial to keeping South Africa out of junk credit status. In addition, the three rating agencies warned government not to meddle with the Finance Ministry. This message has perhaps fallen on deaf ears.
During a debate with Justice Malala in Cape Town last Wednesday, Gordhan replied to the political commentator’s jab at SAA: “Until now I was enjoying my evening and then he brings up SAA.
“So, let me give you the diplomatic statement: we are working on it, Justice,” he said. “But at least you know the kind of difficulties we have, but we are hoping we can make a good announcement shortly.”
Hong Kong relief
Fin24 reported on Wednesday that authorities in Hong Kong granted SAA an extension until September 30 to submit regulatory documents and prevent the airline from being deregistered there, effectively halting its flights to Hong Kong.
This extension is in line with Hong Kong's legislation, SAA spokesperson Tlali Tlali told Fin24 on Wednesday afternoon.
"The extension has given us more room to resolve all matters that may be outstanding from a compliance point of view," said Tlali.
SAA has claimed in the past there is nothing irregular about the request from Hong Kong. This was because SAA has not yet filed its financial statements for 2014/15 nor for 2015/16.
Tlali added that there is heightened engagement with National Treasury to ensure that SAA continues to comply with the requirements of all jurisdictions where it operates globally.
FULL STORY: SAA gets breather on Hong Kong deregistration
Earlier on Wednesday Parliament's Standing Committee on Finance expressed concern about reports that SAA could be deregistered in Hong Kong if its financials are not finalised by September 6.
FULL STORY: SAA warned to file financials, overhaul board