JOHANNESBURG, October 19 – Cabinet has approved sweeping changes to the board of South African Airways and replaced controversial chairwoman Dudu Myeni with JB Magwaza, well-placed sources confirmed on Wednesday evening.
At a meeting earlier in the day, President Jacob Zuma’s Cabinet approved a new board which saw Myeni; Tryphosa Mmakeaya; Mzimkhulu Malunga; Siphile Buthelezi; Nazmeera Moola; and Gugu Sipamla ousted.
Other than Magwaza the new board members are Nolitha Fakude as deputy chairwoman; businessman Geoff Rothschild; aviation expert Ahmed Bassa; accountant Tinyiko Mhlari; and businessman Martin Kingston.
Cabinet reportedly retained Swazi Tshabalala; Peter Tshisevhe; Thandeka Mgoduso; Pieter Maluleka; and Akhter Moosa, eNCA reported.
Sources said Myeni’s removal took extensive negotiating on the part of Finance Minister Malusi Gigaba.
The minister had given SAA’s creditors an undertaking that he would replace Myeni, who is seen as close to Zuma and had survived a bruising public showdown with his predecessor Pravin Gordhan over, among other issues, about her attempts to renegotiate a deal with Airbus.
It was expected that a formal announcement on the changes to the board would be made at a post-Cabinet briefing on Thursday.
On October 5, Parliament’s standing committee on finance called for SAA to hold an annual general meeting in November and to find a replacement for Myeni.
“The SAA’s Annual General Meeting (AGM) should be held on 3 November as proposed by Treasury, and the current board chairperson’s term should end with the AGM. People with appropriate aviation experience and expertise should be appointed to the board, management strengthened and allegations of corruption should be tackled speedily,” committee chairman Yunus Carrim said at the time.
This week the committee received a legal opinion on National Treasury’s R3 billion bailout to the airline last week indicating that it might have been unlawful.
The Democratic Alliance’s deputy finance spokesman Alf Lees contended that Gigaba may have tried to side-step Parliament with the 11th-hour bailout, designed to prevent the airline defaulting on one of its loans, because National Treasury had known at least a month earlier that SAA would not be able to make its repayment to Citibank.
On Wednesday the committee said Gigaba was right not to let the airline default, but he should have submitted a special appropriations bill to Parliament instead of relying on section 16 of the Public Finance Management Act.
The bailout was the second this year to debt-ridden SAA to allow it to honour its loan repayments. At the end of June, Gigaba also authorised money from the National Revenue Fund be used to allow the airline to repay R2.2 billion to Standard Chartered Bank.
Gigaba reported to Mbete on that lifeline in a letter dated July 20, and said it was necessary as Standard Chartered Bank wanted the airline to repay R2.2 billion extended in short-term bridging facilities in full at the end of June.
The committee had also solicited legal advice on whether the recent extension of Myeni’s term at had been legal.
On Wednesday, Lees welcomed the news of Myeni’s axing, saying: “She has done untold damage to SAA and should not have been reappointed to the board, and certainly not as board chair, in September 2016.”