Brown's had it with SAA

A late call by SA Airways chairperson Dudu Myeni for yet another government bailout has infuriated Public Enterprises Minister Lynne Brown, who has ordered an investigation into the management and financial failures of the airline.

SAA, which has been kept afloat by state-backed loans, had lost R16-billion as of March 2013.

Myeni had asked for a R4.42-billion going-concern guarantee.

In her response, Brown sent a three-page letter highlighting her frustrations at the attitude of SAA with regard to its finances.

"The minister of finance and I are very concerned about the continuous late submissions requesting both ministers to decide on important financial matters at short notice," wrote Brown in a document leaked to The Times.

Myeni apparently asked for the guarantee only a few weeks before the government had to decide on all requests for government guarantees of debt.

Brown said SAA had again failed - as every year - to apply in time for an extension of its air traffic liability guarantee.

To compound matters, SAA was close to defaulting on its RMB and Investec borrowing facilities. A default is bound to affect the borrowing costs of other state-owned companies.

SAA failed to notify its lenders of the possibility of a default.

The delay in settling a R1.54-billion loan had resulted in additional costs to the airline, which amounted to fruitless and wasteful expenditure, the minister said.

"The government therefore recommends that an investigation be instituted by SAA.

"If misconduct is confirmed [it must] ensure that appropriate disciplinary proceedings are initiated immediately against those responsible," she said.

The investigation has once again led to Myeni being at loggerheads with certain board members and the airline's executives.

Only weeks before, minutes of a board meeting, seen by The Times, showed that Myeni was an unpopular chairperson and that a number of board members wanted her resignation.

Some board members proposed that the CEO, Monwabisi Kalawe, compile a response to Public Enterprises Minister Brown but Myeni, who has drafted her own response, was not happy with that arrangement.

"It concerns me greatly that members of the board hastily propose that the CEO investigate the matter," she wrote to the board.