Dudu Myeni has vowed to stay on as the chairperson of SAA’s board “until ubaba goes”.
Three senior SAA executives and another source close to the board told City Press that Myeni had informed those in her close circle at the beleaguered airline that she would not step down until President Jacob Zuma, known as “ubaba”, finished his second term of office in 2019.
This comes at a time when banks and other financiers are pulling the plug on loans they gave to SAA, citing her continued presence on the airline’s board as one of the reasons.
On Thursday, Nedbank became the latest to refuse to extend loans to the national carrier for this reason.
Two top SAA officials told City Press on Friday that during a marathon meeting, held the day before and attended by representatives of SAA, Nedbank and National Treasury, Nedbank’s officials said it would be difficult for them to extend loans to the airline if Myeni was still there.
Myeni’s contract as chair of the SAA board expired on Thursday, but Treasury has asked her to stay on until the airline’s annual general meeting (AGM), which was rescheduled from Thursday to an unspecified date in November.
Last week a National Treasury spokesperson said: “Although the chairperson’s term ends on August 31 2017, she has been asked to continue to serve until the next AGM. She serves at the prerogative of the finance minister. The AGM is scheduled to take place sometime in November.”
However, SAA spokesperson Tlali Tlali said: “It is not true that the AGM was due on the date you propose. The company has until September 30 to hold its AGM, as provided for in legislation. If that date will not be met ... the shareholder makes appropriate arrangements with the Speaker of the National Assembly to inform Parliament and propose alternative arrangements.”
Sources with inside knowledge of Thursday’s meeting told City Press that among those who attended were Treasury director-general Dondo Mogajane and SAA chief financial officer Phumeza Nhantsi.
They said Nedbank officials were willing to consider extending SAA’s loans, but their “attitudes hardened” as soon as Mogajane told them Myeni was staying on until November.
“The Nedbank officials wanted to know why Myeni was staying on because Gigaba had promised all banks that she would leave as soon as her contract expired,” said one source.
Another SAA executive, who received an official briefing from those who attended the meeting, confirmed Nedbank’s hardline attitude: “They basically said they will find it close to impossible to continue financing SAA if Myeni continues as chairperson.”
An SAA board member told City Press he was not surprised. “All banks do not want Dudu and it is not a new thing. SAA, Treasury and the board all know that the banks do not want Dudu. They all know what she gets up to.”
Tlali confirmed the meeting, but declined to comment on discussions. “SAA and National Treasury, together with the lenders, normally have weekly meetings to discuss SAA’s funding situation and the progress that the company makes on the strategy.
“The details of the discussions with the lenders are confidential.”
Nedbank is not the first financial institution to withdraw support. Two months ago, Standard Chartered revoked its R2.207bn SAA loan, followed by Citibank, which last month pulled the plug on a R1.8bn loan.
A source said Standard Chartered and Citibank were willing to continue financing SAA, but only if Myeni left and government injected its own money into the airline and appointed a chief restructuring officer.
Tlali, however, said Standard Chartered’s loan had matured and had to be settled.
“Loans to the value of R6.8bn will mature on September 30 2017 and SAA is in discussions with its lenders to consider options to extend the loan facilities we have with them.
“The Citibank loan is one of the loans that are maturing on September 30, and we are in discussions with Citibank on a payment plan,” he said.
Two weeks ago, Treasury revealed it might consider selling government’s stake in Telkom to recapitalise SAA.
UNTIL UBABA GOES
Two sources told City Press that Myeni had informed them personally that she would only leave SAA when Zuma leaves office.
After Treasury told City Press that Myeni would stay until November, one source said: “I told you she is going nowhere. She has said it and everybody knows it. The likelihood is that in November the AGM will be rescheduled to 2018, and her contract will be extended again. It is not far-fetched to think that the AGM could be postponed until 2019.
“Malusi [Gigaba] is under pressure from financiers to remove her. But there is also pressure from elsewhere to keep her.”
Another source close to the board said: “Those who think Dudu is going away are in for a shock. The ball is now in [Gigaba’s] court to convince us otherwise and to prove who exactly is in charge.”
Myeni did not respond to calls, emails or SMSes this week.
DUDU ‘DRAGS SAA TO THE BRINK’
Myeni, who was appointed to the SAA board in 2009 and became its chairperson in 2012, has been widely blamed for the airline’s financial woes.
A letter of complaint, written by the board’s members to then public enterprises minister Malusi Gigaba, indicates that as early as mid-2013, her board colleagues had had enough.
They explain that in May that year, the board decided to buy 10 new aircraft, but Myeni tried three times to change the resolution to reflect that the board approved the purchase of only two.
The letter states: “On June 23 2013 the chairperson penned a letter to the department of public enterprises, advising the minister that the board had amended its resolution from financing 10 to financing two aircraft. The truth is that this letter was never previewed by the board, and even more disturbing was the attempt to change a board resolution. This amounted to a gross misrepresentation of facts.”
Elsewhere, the letter says of Myeni: “The conduct of the chairperson in overly acting against resolutions or seeking to change resolutions is becoming pervasive. The board chairperson has repeatedly demonstrated that she is not equal to the challenge of leading this board towards a successful turnaround of the airline.”
The allegations against Myeni keep piling up.
Last year, after SAA Technical (SAAT) awarded a R1.2bn aircraft components tender to a joint venture between AAR Corporation and JM Aviation, Myeni called SAA board members and procurement executives, pleading with them to cancel the tender and award it to Air France. Air France later challenged SAAT’s decision in court and lost.
Former SAA board member Yakhe Kwinana refused to comment, but a letter she wrote to Myeni at the time shows she refused to cooperate with Myeni’s request. “Kindly take note that the SAAT board exercised its power and its own discretion in awarding the tender to AAR in line with the supply chain policy,” she wrote.
Another former board member said: “Yes, Myeni called me and we had a lengthy conversation about it. I told her that we could not reverse a legitimate decision by the procurement unit.”
Another senior employee at SAA said: “She also called me and gave all sorts of incoherent reasons why AAR’s tender should be cancelled.”
When asked about this, Tlali responded: “Your enquiry in relation to the AAR matter falls under the basket of matters that are currently being looked at by forensic investigators.”
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