South Africa

ORCHESTRAL MANOEUVRES IN THE DARK

Dudu Myeni tries one last trick to delay court hearing ‘delinquent’ case against her

Dudu Myeni tries one last trick to delay court hearing ‘delinquent’ case against her
Former SAA board chairperson Dudu Myeni . (Photo: Gallo Images / Rapport / Deon Raath)

The case to have former SAA board chairperson Dudu Myeni declared a delinquent director was finally set to go ahead on Monday, 27 January. But Myeni is not out of delaying tactics just yet – launching a fresh application to appeal against the right of Outa to file a civil case against her and arguing for her right to change her plea.

In October 2019, the North Gauteng High Court heard that former SAA board chair Dudu Myeni did not have enough money to pay for legal services, or to travel from her home in KwaZulu-Natal to attend court proceedings against her.

Fast forward to January 2020, however, and Myeni – who reportedly still sits on the boards of 13 companies despite claiming unemployment – has a three-person team of lawyers to represent her. But Myeni was still a no-show in court when proceedings kicked off on Monday, 27 January 2020.

Monday was supposed to be the first day of proceedings to determine whether Myeni should be declared the first delinquent director of a state-owned entity – a declaration which would bar her from holding any future positions as director.

But just a few days beforehand, Myeni’s legal team, headed by advocate Nqabayethu Buthelezi, launched a delaying application to appeal against rulings handed down by Judge Ronel Tolmay in December 2019.

Judge Tolmay had previously dismissed Myeni’s applications to change her original plea, to have the entire SAA board included in the proceedings alongside her, and to challenge the legal standing of Outa to bring a case against her in the first place.

Myeni’s lawyers have now indicated their client’s desire to appeal these rulings – despite the fact that the time available to her to do so has since lapsed.

In court on Monday, advocate Buthelezi blamed miscommunications for the delay in filing the leave to appeal.

The crux of Myeni’s current argument, as contained in court papers, is that Judge Tolmay “misdirected herself”, in 2019 by not hearing the challenge to Outa’s legal standing before considering the other two applications regarding Myeni’s plea and the attempt to add her fellow board members to the litigation.

Myeni’s lawyers also argue that the judge misinterpreted the Companies Act by agreeing that Outa had legal standing in the matter. The act states that an application for a delinquency order may ordinarily only be brought by an entity with a direct interest in the company in question, such as a shareholder, or trade union.

However, the act also stipulates that the court may give legal standing to a person or entity “acting in the public interest”, in such a case. Judge Tolmay previously agreed that Outa was acting in the public interest by bringing the matter, as it involved a state-owned entity funded with public money.

The issue regarding Myeni’s pleading relates to the former SAA chair’s original admissions of wrongdoing relating to certain business decisions taken under her watch. Myeni’s lawyers now say that she was given poor legal advice at the time.  

Judge Tolmay appeared to show little patience for the new applications for leave to appeal on 27 January 2020, at one stage remarking that the attempt to delay proceedings was wasting money that Myeni claimed to be short of.

Lawyers for Outa, which has brought the case against Myeni alongside the SAA Pilots Association, argued on Monday that there had been no application for condonation – in other words, a request for a time extension on the right to appeal.

Speaking to Daily Maverick after the day’s proceedings, Outa’s chief legal officer, Stefanie Fick said: “The whole premise of our argument today was that the court gave judgment; [Myeni’s applications] were dismissed. Now you want to postpone the trial and waste costs while claiming you have no money.”

Outa’s lawyers also argued in court that a further delay to proceedings would seriously inconvenience witnesses due to testify against Myeni.

“Some of our witnesses are overseas – previous executives at SAA who have moved on,” Fick said.

“Our counsel made the argument that we waited for [the appeal] time period to lapse before we started in earnest with trial prep.”

 The case against Myeni was originally brought by Outa and the SAA Pilots Association in 2017. Fick has previously compared Myeni’s delaying tactics as akin to the “Stalingrad strategy” deployed by former president Jacob Zuma in attempting to evade facing corruption charges.

Outa has stated that it believes its litigation is “crucial to restore accountability at SOEs”.

The advocacy organisation points to the fact that SAA was profitable up to the point at which Myeni became chair of the board in December 2012. During Myeni’s five-year tenure as chair, SAA registered losses of almost R17-billion.

Among the specific claims Outa makes against Myeni is that she personally intervened to block a board-approved deal between SAA and Emirates in 2015, causing “significant financial losses and reputational harm”, for the airline.

Outa argues further that Myeni unlawfully interfered in 2013 agreements to buy new Airbus aircraft for SAA in order to improperly benefit another party, and then backed the leasing of aircraft instead of purchasing in order to “improperly involve and benefit a new aircraft leasing company”.

It is also Outa’s contention that when Ernst & Young reported “significant problems with SAA procurement and contract management”, to the SAA board in 2015, Myeni and the board took no action.

Myeni’s responding court papers have argued that “at all material times [Myeni] performed her director’s functions within and duties to SAA as is required by the Constitution, the PFMA [Public Finance Management Act] and the Companies Act”.

Myeni also contends that it is unfair that she be held personally responsible for SAA’s failings during her time as chair, as “decisions of the board are taken by majority vote”.

As a result, “[Myeni] is not responsible for the decisions of the board taken by majority vote, merely because she was the chairperson of the board, as if these were her decisions”.

Myeni further argues that she, “on several occasions raised with the members of the board and with the management of SAA, the concerns raised in the [Ernst & Young] report”, but the board and the SAA executive “resisted [Myeni’s] efforts”.

Judge Tolmay is expected to rule on 28 January 2020 whether Myeni will be granted leave to appeal, or whether the case – which is set down for five weeks – will proceed as planned. DM

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