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The NPA should investigate the allegations against Dudu Myeni

It is absurd that those responsible for pushing SA to the brink of bankruptcy have not been charged with any criminality.
SAA lost at least $100m (R15bn) in annual revenue due to Myeni’s scuttling of a MoU between the national carrier and Emirates. Image: Moneyweb

It is a travesty that two civil organisations – the Organisation Undoing Tax Abuse (Outa) and the South African Airways Pilots’ Association (Saapa) – had to approach the court, at their own cost, in an attempt to bring a director of a company to account for alleged unlawful actions.

At a time when South Africa is about to fall off the fiscal cliff, it is more than a travesty that the directors responsible for hollowing out major state-owned enterprises (SOEs) such as South African Airways (SAA), which are largely responsible for South Africa’s impending bankruptcy, have so far not been charged with any criminality.

The order to have Dudu Myeni, former non-executive chair of SAA, declared a delinquent director by the court has no standing on any criminal investigation into her alleged involvement in further acts of corruption, maladministration, and money laundering at SAA.

The plaintiffs suggest that these matters be fully investigated by the National Prosecuting Authority (NPA) without further delay, and that appropriate action be taken.

Limited insight into the scale of what took place

To ensure that the delinquency trial could be completed in the allotted five weeks, a decision was made to lead evidence on only two of the cases of alleged misconduct: the ‘Emirates deal’ and the ‘Airbus swap transaction’.

While judgment is only expected to be handed down in a few weeks’s time (the hearings concluded on Friday), these two cases of misconduct are seen as sufficient to ensure a lifelong declaration of delinquency.

Evidence was not led on three additional causes of action: a 2016 BNP deal, a 2013 Pembroke transaction, and an Ernst & Young report. It is to be noted that the plaintiffs did not absolve Myeni of any misconduct in these three matters, nor did they concede any weakness in their case.

For sake of completeness, the five matters are briefly summarised below:

The Emirates deal

Myeni scuttled a non-binding memorandum of understanding (MoU) between SAA and Emirates in 2015, irreparably harming SAA’s relationship with Emirates. The revenue lost was a minimum of $100 million per year.

The Airbus ‘swap’ transaction

Myeni obstructed a deal with Airbus to allow SAA to escape an onerous contract for the purchase of aircraft. Further, she misrepresented board resolutions, acted without board authority, misrepresented the facts to the minister of finance and parliament, and put SAA’s financial position at risk.

The 2016 BNP deal

BNP Capital won an SAA tender to provide financial advice on debt relief and source a R15 billion loan. Many parties were involved in this transaction, but essentially BNP would be charging R2.6 million for the financial advice and would make R256 million on raising the R15 billion loan. Outa accused SAA and Myeni of not following the correct procurement procedures in awarding the tender to BNP. In 2018 former BNP CEO Daniel Mahlangu agreed to comply with Outa’s subpoena that he hand over all documentation relating to the deal. Substantial evidence on this transaction was led at the Zondo Commission of Inquiry into allegations of state capture, and it is up to the NPA to delve into any criminality.

The 2013 Pembroke transaction

In May 2013 the SAA board resolved that the first 10 Airbus A320 aircraft were to be acquired through a novation sale-and-leaseback transaction with Pembroke Aircraft Leasing, the aircraft financing arm of Standard Chartered Bank. In other words, Pembroke would purchase the 10 aircraft from Airbus, and Pembroke would then lease the aircraft back to SAA. Myeni, however, informed the minister of public enterprises that only two A320-200 aircraft would be purchased by Pembroke and leased to SAA, and then she attempted to force the company secretary to amend the board minutes and the board to overturn its May resolution.  

The Ernst & Young report

A report prepared by Ernst & Young in December 2015 identified substantial problems in procurement and contract management practices at SAA. The report identified numerous irregularities, including:

  • Overpayment in respect of SAA’s contract with Kintetsu World Express South Africa;
  • Overpayment in respect of SAA’s contract with Société Internationale de Télécommunication Aeronautiques;
  • Failure to follow correct tender processes and overpayment in respect of Air Chefs’ contract with ADJ Maintenance cc; and
  • Conflict of interest and overpayment in respect of SAA Technical’s contract with Mtha Aviation.

Myeni and the board took no action to give effect to the recommendations of the report.

Closing arguments 

In closing arguments, counsel for the plaintiffs, Advocate Carol Steinberg said: “During her time at SAA, Ms Myeni blocked, delayed and obstructed key initiatives to turn the airline around. In doing so, she broke the law and flouted basic governance principles.”

Shocking evidence was led to demonstrate Myeni’s alleged involvement in “further acts of corruption, maladministration, and money laundering at SAA”.

The evidence established four repeated forms of serious misconduct:

  • Dishonesty;
  • Obstruction and interference;
  • Improperly inserting middlemen; and
  • Governance failures.

This is, however, not a criminal trial.

The purpose of this action is to seek an order from the court to declare Myeni a delinquent director for life under the Companies Act.

A delinquency order – if given – carries no jail sentence.

Any criminal action is to be pursued by the NPA. Every South African should be hoping that it is.

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COMMENTS   26

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Frankly, I don’t think the NPA even have a clue as to where they should start with any of these investigations. It’s all good and well for the organization to claim that it’s in the process of cleaning up its own internal affairs, but truthfully that’s where the prosecutions should begin. I.E. Those who are removed in the cleanup.
To attempt to track down and prosecute wrongdoers outside of the NPA 1st is like putting the cart before the horse. If the likes of Shaun Abrahams, etc. we’re part and parcel of crimes during that era, then what evidence or trail is likely to exist? (likely nothing)

You need to squeeze those who are within reach in hope of exposing other individuals whom they were protecting.

I’m beginning to realise that more and more of us use the opportunity to comment as a worthwhile free alternative to forking out cash for a consultation with the local psychologist.

There, now I feel better too!

The sad reality is that many South Africans need psychological help given the state of this unhappy failed state. Daily crime, poverty, failed SOEs, pending EWC, BEE, captured judiciary,Pensions to be stolen from to pay SOEs top management, ANC criminals running the country etc. causes many many psychological problems

I can’t afford anti depressants…lol! And even after the NHI makes it free I wouldn’t go there. Memories of the esidimeni incident spring to mind.
Oh well. I guess I’ll just have to remain a lunatic!

I have a feeling that a lot of the evidence that the NPA would need for prosecution has already been filed in the ‘Paper Shredder’. Witnesses will find themselves being disposed of in a similar manner to that of Morgan Tsangerei’s late wife in Zimbabwe.

It looks like the NPA cannot go the distance with these corruption cases. Perhaps these type off cases are too complicated for them?

I think that there is a provision in the NPA Act that permits the NPA to bring in advocates, etc. to prosecute particular cases … to hire the competence required for a particular case. Problem solved!

If so, please use this provision more enthusiastically, Ms. Bathoi.

Budgets are not very flexible due to the long term effects of the Zuma corruption epidemic. The best prosecutors left during the Jiba years and are not returning.

A year and a bit on. So much expected from Batohi so little done. These days in SA normal professional ethical conduct is non existent and when happening seen as extraordinary. As a society our values is in an abyss and with currant leadership I see no improvement.

Well said and “widespread” is correct. My view is that there are many cases like Myeni’s but she’s been clever enough (contrary to some opinion, these ANC elites are not stupid, just venal and self centred) to hedge her bets. My guess is that these lucky cadre deployees have done this by ensuring that a little bit of crooked cash gets to everyone; from the ANC party itself to ALL its leadership; Ramaphosa included. The NASREC ANC conference and the Bosasa cash shows that he he was spending but wasn’t spending his own money.

Batohi et al know how the game is played; you wait for a nod and a wink from up ANC high before you move a muscle otherwise you are history.

“Madam” at the NPA is still building “Capacity”. After a year she has not built enough capacity to even take a single high profile case to court.

There are thousands. It should be obvious to CR as well that this is going nowhere. So maybe he needs to stop telling the world they are dealing with corruption. THEY ARE NOT.

Why not “Subcontract” this DUDU case out to Afriform to prosecute? They have capacity to do that?

“Madam” is just a puppet of the corrupt ANC.

Good way to cut the wage bill is to fire the corrupt people and hire competent people back. They will probably be keen to work in the new environment.

There will never be an investigation or prosecution. These talk shows are purely window dressing.Just a little “look we are doing something” escapade. They will take so long that eventually as with that Zuma creature, evidence will be lost, witnesses will die or be killed and the whole thing will fizzle out. Life will go on.

Then there is the brilliant move called the collective. A matter of “Ok we all did it” so arrest us all, 45 million of us and chuck us in jail. Can’t be done, so we will finger a few, give them suspended sentences and let them play golf with terminal diseases for 20 years. Amnesia will be the order of the day

All part of the Robben Island plan, to milk the 4% paying tax and to steal as much as possible, while keeping 30 million fools uneducated in the rural areas to keep them in power.

The ANC NEC does not want to investigate anything. The crooks in CoJ that were fired by Herman Mashaba are back in office.

Ace Magashule does not see a problem if people want to support Zuma.

Even Zimbabwe no longer worships Mugabe, they’d rather forget about him and move on. Can’t prosecute a dead guy but there are many other fish heads available in order to send the right message.

Seems that CR is ….. into the wind.

Thank you Mr. Mbeki, for dismantling the Scorpions to protect your friend Mr. Selebi. Mr. Mbeki opened the flood gates for Zuma and Co. People now consider Mr. Mbeki a good president in hind sight (nostalgia is sweet). The current lawlessness is a direct result of this decision.

Mr Mbeki is proud to be an African.

There are 1,000 other Myeni’s out there! I mean you have to look after your supporter base that make party contributions. NASREC cost R1bn to fund. You think they contribute for free, out of goodwill?

Tenders, tenders and more tenders.

When I read the comments, I saw a lot of exclamation marks. Ag no man folks, where are your manners ? Surely this is very insensitive to Advocate Batohi, who is sleeping as we speak and should not be disturbed ?

Don’t hold your breath for prosecutions. ANC cadres are royal game, not subject to the law like the rest of us plebs. Zondo commission and all the hot wind about clamping down on corruption are just to appease the rating agencies and those making a noise to buy time so that it all blows over while they look for fresh sources of cash to loot.

Let’s face it, no government branch is never going to investigate these criminals. Like everything in this country, the SA public gets nothing for our taxes. Government will protect its own, no matter what.

Sadly, your comment is the real SONA.

Shades of the Prosecuting Authority in the Cayman Islands

“Ex Africa semper alliquid putridum” with apologies to Plyni the Elder.

T.I.A – This is Africa.

N.P.A. = No Prosecutions Agency.

Nothing will happen to Dudu. She is Mr. Zuma no.2 and the old ANC faction (Mr. Ace and his friends) still controls the ANC…

End of comments.

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