South Africa, Business

SAA: In a big tactical win, Treasury submits new board nominees

By Marianne Thamm 1 September 2016

While Finance Minster Pravin Gordhan was winging his way to the G20 conference in China (on our national carrier, one hopes), a list of 13 names of new SAA board members was submitted to a Cabinet sitting on Wednesday. And while Number One’s bespoke wingwoman, Dudu Myeni, is set to remain the chair, she will be closely monitored by a heavyweight team the Treasury fought hard for. By MARIANNE THAMM.

While the Democratic Alliance’s Shadow Minister of Finance, Alf Lees, on Thursday described the rumoured re-appointment of Dudu Myeni as chair of the SAA board as a “massive political defeat” for Gordhan, Treasury sources have hailed it as a tactical victory.

President Zuma might have stomped his feet and insisted that the disastrous Myeni remain chair, but she will be surrounded by a strong and credible team of business experts who are unlikely to be malleable or take any, um, crap.

Behind the scenes, Treasury fought hard for a list of heavyweight nominees that has been submitted to Cabinet:

  • Chief Financial Officer of AngloGold Ashanti, Christine Ramon (who is pipped to be Myeni’s deputy);
  • Former SAA chief financial officer and current Chief Financial Officer of PPC, Tryphosa Ramano (another contender for deputy);
  • Former Business Day and Financial Mail MD, Mzimkulu Malunga;
  • Economist and strategist with Investec Asset Management, Nazmeera Moola;
  • Lawyer and merger and acquisition specialist Peter Tshisevhe;
  • Aspen Group senior executive, Stavros Nicolau;
  • Transport and Logistics Leader for PwC Southern Africa at PricewaterhouseCoopers, Akhter Moosa;
  • Senior advisor at the global consulting firm BCG and former Managing Director for Public Policy and Strategy at Barclays Africa, Gugu Sepamla;
  • Former Chief Executive Officer of the Industrial Development Corporation and current Executive Director of Kupanua Investments, Swazi Tshabalala;
  • Chairwoman of the Agri Business Development Agency, Martha Mbatha;
  • Attorney and founding member member and Secretary-General of the Progressive Professionals Forum (PPF), Siphile Buthelezi;
  • CEO of Freightdynamics, Thandeka Mgoduso, and
  • Umkhonto weSizwe veteran and former ANC MP, Peter Maluleka.

The names were submitted by Gordhan to a Cabinet sitting chaired by Minster of Women in the Presidency Susan Shabangu as both President Zuma and Deputy President Cyril Ramaphosa were otherwise engaged. Twelve names will be selected and sent to President Zuma to be ratified. It is expected that an announcement of the nominees will be made on Friday.

The retention of Myeni as chair is seen as a compromise by Gordhan, who has refused to provide fresh guarantees to the scandal-ridden and cash-strapped SAA. It is likely that a R5-billion guarantee for SAA will now be approved. SAA has not submitted financials for 11 months, in contravention of the Public Finance Management Act. In July Gordhan submitted a letter to Parliament’s standing committee on finance asking for an extension to 15 September.

Just as Gordhan, in a strategic move (working for change from the inside), voted along with with the rest of ANC MPs defeating a motion to impeach President Zuma in April this year, so too has he opted to compromise in order to save the national carrier from financial ruin and further scandal and mismanagement.

At the weekend SAA advertised for bids to finance R16-billion in debt. So far there have been few takers. The climate with regard to state-owned enterprises is stormy at present after the surprise announcement by President Zuma in August that he was to chair a new body to oversee them.

On Wednesday this week Futuregrowth Asset Management announced that it would no longer be lending over R1.8-billion to state-owned enterprises Eskom, Transet, Sanral, the Land Bank, the IDC and the Development Bank.

Andrew Canter, Futuregrowth’s Chief Investment Officer, said the fund would only resume giving loans once proper governance and oversight is restored at SOEs.

We’ve observed recent reports that strongly hint of conflict between branches of South Africa’s government, the possible machinations of patronage networks and a seeming challenge to the National Treasury’s independence,” Canter told Bloomberg.

He added that the government appeared to be “at war with itself”.

We have no context, the timing is suspect and we find ourselves unable to make long-term decisions,” said Canter.

On Thursday Denmark’s Jyske Bank, also a money manager, pulled the plug on Eskom in the wake of the Futuregrowth announcement.

On Thursday ANC spokesman, Zizi Kodwa, said government had noted the decision by Futuregrowth and was “concerned by the posture adopted by Futuregrowth. It is our hope that Futuregrowth will engage with the relevant ministries and parastatals to discuss the concerns they have, and together find a solution in the interest of the economy and country”.

Myeni’s disastrous term at SAA began in 2009 shortly after Jacob Zuma was elected president and she was appointed to the board. She was appointed chair in 2012 after the mass resignation of 14 board members, including Cheryl Carolus.

It is believed that Myeni’s current two-year contract cannot be extended and that there will be a performance review of the chair and deputy chair every two years.

Dudu Myeni’s star, like that of her political principal Jacob Zuma, is on the wane. The odd couple, who have both successfully managed to manoeuvre themselves into positions of power where they have wreaked havoc and appeared to have been untouchable, are feeling the heat. It is only a matter of time before, like all stars, they will experience an inevitable gravitational collapse. In the meantime the country’s national carrier can begin its long haul towards a turnaround. DM

Photo: President Jacob Zuma and SAA Chairwoman Dudu Myeni (GCIS)


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