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More allegations on SAA’s suspended CEO emerge

Said to hire friend on an inflated salary.

South African Airways’ board suspended Chief Executive Officer Monwabisi Kalawe in October because of allegations of misconduct, including that he hired a friend on an inflated salary, according to two people familiar with the situation.

Kalawe appointed a former colleague as an executive assistant on a salary more than double the amount earned by the previous employee, said the people, who asked not to be identified because the matter is confidential. The allegations are being put to Kalawe through an internal disciplinary process. Kalawe referred a request for comment to his lawyer, Maurice Crespi.

“He has given SAA his response to the allegations,” Crespi said by e-mail on Thursday. “If you want to know what his response is, you are welcome to speak to SAA and they must disclose to you such information as they deem fit. Nothing in this response should be taken as an implicit concession that our client would be unable to answer the imputations of improper conduct on the merits.” South African Airways didn’t respond to e-mailed queries that it confirmed receiving.

SAA, Africa’s biggest airline by traffic, suspended Kalawe, who was appointed June 1, 2013, without disclosing at the time what the allegations against him were. He’s now in disciplinary hearings before an independent chairman, Nazeer Cassim, a senior member of the Johannesburg Bar, the carrier said in an e-mailed statement last month. A date for the completion of the disciplinary proceedings hasn’t been announced.

‘Technically bankrupt’

SAA, which is based in Johannesburg, instituted a 90-day turnaround plan that was due to end this month, to reduce costs as it seeks to cut reliance on state assistance following three consecutive years of losses. The company is “technically bankrupt” and is surviving off government-guaranteed loans, Public Enterprises Minister Lynne Brown said in October.

Kalawe is also accused, in the internal disciplinary process, of wasteful expenditure and breaching the Public Finance Management Act for pushing for SAA to pay Bagport South Africa R400 million ($33 million) for a three-year contract to wrap luggage to reduce theft, the people said. The airline paid R26 million for a three-month trial, which appeared to be overpriced because it exceeded the compensation SAA was paying to customers for stolen or lost items, one of the people said. No charges against him have been brought before a court.

While Kalawe was suspended for the initial allegations, he now also faces an allegation of corruption and invasion of privacy for paying R150 000 for forged bank statements in an attempt to show that Duduzile Myeni, the company’s chairwoman, had received bribes, the people said.

The Sunday Times reported on its website on February 28 that the bank statements were fakes, citing ENSAfrica, a South African legal firm. In the same report SAA spokesman Tlali Tlali told the Johannesburg-based newspaper the documents had the “hallmarks of an elaborate conspiracy.”

Kalawe will remain suspended until the inquiry is completed, the board said last month.

©2015 Bloomberg News

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