Organisation Undoing Tax Abuse (Outa) and the South African Airways Pilots Association (Saapa) have filed a court application seeking to declare South African Airways (SAA) chairperson Dudu Myeni a “delinquent director”.
Outa filed the application at the North Gauteng High Court on Tuesday.
Addressing a media briefing in Johannesburg, on Wednesday, Outa portfolio director for transport Ben Theron said SAA’s situation had worsened significantly and unnecessarily at the hands of Myeni.
“During Myeni’s tenure as chairperson, SAA has lost an estimated R10.5-billion over a five-year period, despite the fact that SAA was profitable between 2010 and 2012,” he said.
He pointed out that one of the substantive matters Outa has listed in its claim pertains to Myeni having proceeded, in May 2016, with the appointment of financier BnP Capital as a transaction adviser, despite expert advice by the group treasurer that this service was not required.
Outa last year took SAA to court and successfully halted the BnP contract, which was later cancelled.
Theron also claimed Myeni had illegally interfered with a proposed deal with airline Emirates, whereby Emirates proposed an Enhanced Strategic Partnership between itself and SAA.
“This deal would have greatly benefited SAA in many ways, including a direct financial gain of R2-billion for the company. When the SAA board voted to approve the proposal, subject to a memorandum of understanding between SAA and Emirates, only Myeni voted against it,” he said.
Theron noted that these failures and more occurred at SAA, either at Myeni’s own hand or under her watch.
“It cannot be said that she was unaware of these crises as not only was she duty bound to oversee the airline but Ernst and Young released a report in December 2015 covering [irregular] procurement and contract management practices at SAA and Air Chefs, Mango and SAA Technical (SAAT),” he said.
He pointed out that the report had detailed examples of overpayment, irregular tender practices, conflicts of interest and informal and suspicious contracts.
“The legal action brought against Myeni is based on our claims that she has been seriously remiss in her fiduciary duties and responsibilities as the chairperson and, as such, has caused the airline significant harm, by contravening Section 162(5) of the Companies Act,” Theron said, adding that Outa believed this action was necessary, as it would bring Myeni to account for her conduct.
“She has grossly abused her position as a director, and has intentionally, or by gross negligence, inflicted harm upon SAA and acted in a manner that amounted to gross negligence, wilful misconduct or breach of trust in relation to the performance of a director’s functions within SAA.”
He noted that, should the court rule in their favour, Myeni could be disqualified from fulfilling a position as a director or executive for any organisation within South Africa, for at least seven years or longer.
SAA was contacted for comment but has not yet responded.