The decision by troubled South African Airways (SAA) to appoint a foreign-based company to the tune of millions of rand to review its restructuring and turn-around strategy has triggered a storm of protest.
Although the national carrier is adamant that the appointment of Seabury consulting, a New York based consulting firm was above board and was endorsed by SAA board, Weekly Xposé has reliably learnt that not all board members gave the appointment a thumbs up and that the deal was rushed through by a few board members who are allegedly proxies of influential political and corporate individuals with vested interests in the airline. Weekly Xposé also has it on good authority not even SAA board chairperson Dudu Myeni endorsed the contract.
The controversial deal lays bare the dysfunctional state of the new SAA board appointed last September after a compromise deal was struck between President Jacob Zuma and former Finance Minister Pravin Gordhan which saw the retention of Myeni as board chairperson. An SAA insider told Weekly Xposé that Myeni was very unhappy and frustrated as she has been reduced to a ceremonial figure and has been stripped of her powers by new board members that were appointed at the behest of Gordhan who are “literally running the show and are serving the interests of politicians and business people with interests in SAA”. “So powerful are Pravin Gordhan’s board appointees they are brazenly finalising a deal for aircraft leases to be awarded to a company with links to politically-connected business people,” said the source.
The controversial R60m contract awarded to Seabury has not only been condemned by SAA’s largest union, the South African Cabin Crew Association (SACCA), it has also earned the wrath of the Decolonisation Foundation which has since written a letter to President Jacob Zuma requesting him to set up a judicial commission of inquiry into SAA. In its letter the foundation said: “It has come to our attention that SAA has recently entered into certain unholy debt restructuring agreements with the South African banks, where the banks dictated to SAA that it must appoint Seabury as its chief restructuring company.
“We find it very strange that the banks would even recommend Seabury, the same company that caused harm to SAA around 2007/8 where its then failed restructuring process saw many SAA employees losing their jobs and outsourcing taking place.” The foundation said in its letter that for jobs to be saved at SAA, “urgent government intervention is needed, including a judicial inquiry or a parliamentary inquiry similar to that of the SABC”.
Contacted for a comment, Myeni referred Weekly Xposé to SAA spokesman Tlali Tlali who said the appointment of Seabury, which has been contracted till June 2017 was above board. “The appointment Seabury consultants followed a multiple source bidding process, which is provided for in our Global Supply Management Policy (GSM Policy). Out of six potential bidders which included local bidders, to whom the tender was issued, and a thorough evaluation process undertaken, Seabury Corporate Advisors emerged as a preferred bidder and was appointed in line with the delegated approval authority.”
Asked whether the appointment was endorsed by the board, Tlali said: “SAA Board approved the appointment and there is a board resolution to this effect.” Asked if there was sufficient consultation with all stakeholder prior to the contract being awarded Tlali said: “We have developed and have already begun implementing a fully-fledged stakeholder engagement plan in relation to our business realignment initiative to which Seabury is working closely with the Board and management. The roll out of the plan involves sessions with all internal stakeholders including staff across various disciplines and labour unions. Meetings have already been convened and SACCA representatives were in attendance.”
Added Tlali: “Outside this process, there are regular meetings management and labour unions have to attend to any matters of mutual interest or that impact on any stakeholders. We are satisfied that there are mechanisms in place that enable dialogue on matters of concern. We are aware that we will not be able to satisfy all our stakeholders at all times but that is not the reason to be despondent.”
Tlali concluded: “We regard SACCA as one of the key internal stakeholders and we are optimistic that we will find one another on any issues they feel we need to resolve. We have not been favoured with any reasons by SACCA on what the basis for their unhappiness is concerning the appointment of Seabury.”