The board of South African Airways (SAA) appeared before Parliament’s watchdog on public spending, the Standing Committee on Public Accounts (SCOPA) on Wednesday and one of the most shocking disclosures was that this airline didn’t own aeroplanes.
SCOPA chairperson Themba Godi kept shaking his head and rubbing his eyes in shock and disbelief that out of a fleet of about sixty aeroplanes, SAA only owned about nine – the rest of the planes it uses are leased from people to whom they were sold some years ago. As a result of the decision to strip the national carrier of its assets, it pays R3.5bn per annum in leasing costs paid in dollars to companies around the globe, “some in Australia and Ireland”, Chairperson of SAA Dudu Myeni explained.
“I’m trying to reflect as you speak….how did we end up with this situation” Godi kept asking.
In what Khaya Sithole describes as a reckless moment in former Thabo Mbeki’s presidency, he (Mbeki) appointed Saki Macozoma to head Transnet and SAA. “Then Saki – at this stage having installed himself as the chairman of SAA replacing Mafika Mkhwanazi (who then went off to chair Transnet after Macozoma’s departure) decides that Coleman Andrews really deserves to own SAA and offers him a few million shares in SAA without informing the Cabinet (apparently he forgot)”.
Here’s the rest of the saga in Khaya Sithole’s account which he wrote late last year
Word has it that this morning Dudu Myeni wrote an 8-page letter to the DA explaining why she does not need to resign as the Chairperson of SAA.
Coincidentally it was precisely 2 years ago when I wrote about the SAA issue. It appears that #StateCapture has BEEN on my mind…
Here’s what I wrote 2 years ago…
One of the privileges extended to Senate Members is the ability to select any random person you like and recommend them for an honorary doctorate. One Senate I know of was given 2 names for consideration in 2013. The names of the recommended persons of distinction – a certain Duduzile Myeni and – wait for it – Ellen Tshabalala (who probably should have been recommended for an undergraduate degree for a start)…
These days Miss Myeni seems to be embarking on a trail of fiscal management at SAA that was initiated by Thabo Mbeki who was once reckless enough to appoint Saki Macozoma as the man in charge of Transnet and SAA. Macozoma – who now finds ample time to lecture us on how the rest of us are clueless about public finances, then seemingly stumbled upon a copy of the Harvard Crimson (the campus leaflet at Harvard University) and read about a cabal of white boys who were about to run Wall Street. This boys club was referred to as Bain Capital and run by a certain Mitt Romney. One of the members of the club – Coleman Andrews – had consulted for airlines in the US and Macozoma worked out that he would be the man to fix SAA.
At that stage, SAA was losing R500 million annually (don’t be surprised, the National Party had a dire record in running airlines). One of the problems is that Coleman Andrews read a newspaper report about crime in South Africa and developed a fear for getting mugged – so Macozoma found a couple of millions to help him live through his fear. And then Andrews expressed that he was more comfortable being paid in dollars – and Saki agreed. And since he will fix the airline – he demands a 2-bonus structure made up of US $1.25 million annually if he hangs out at SAA and an additional bonus based on SAA’s profitability. And Saki agrees.
Then Saki – at this stage having installed himself as the chairman of SAA replacing Mafika Mkhwanazi (who then went off to chair Transnet after Macozoma’s departure) decides that Coleman Andrews really deserves to own SAA and offers him a few million shares in SAA without informing the Cabinet (apparently he forgot). So Coleman eventually agrees to move to SA. But he doesn’t know any estate agents – so Saki approves the acquisition of a 6-bedroom mansion in Bryanston for Coleman – paid for by the state.
Upon arrival, Andrews commissions his own firm – Bain – to help him figure out how to fix SAA. The job is split between Bain and McKinsey and 9 months later – they find a solution. The final bill for the consulting services was R224 million – and Bain got R208.9 million.
Armed with a genius solution – Andrews does exactly what the consultants advised him to do – sell a couple of aeroplanes and suddenly we have a R350 million profit. Andrews gets his bonus and then a certain Jeff Radebe (in a rare display of spirited corporate governance) decides SAA can do better than Andrews – and engineers his exit. When all of this was done – Coleman Andrews received R232 million from SAA – and the greatest scandal of them all – he didn’t have to pay tax – as Saki had negotiated for SAA to take care of that minor problem.
So before you judge Miss Myeni – know your history. #SAA#StateCaptureHistory