'Zuma called Myeni' to torpedo SAA Emirates deal

26 July 2015 - 02:02 By SABELO SKITI

President Jacob Zuma personally called SAA chairwoman Dudu Myeni about the planned multimillion-rand deal with Emirates Airlines - which was scuppered shortly afterwards. According to acting SAA CEO Nico Bezuidenhout, Myeni told him this when she called him in Paris early on June 16 - just hours before the R1.7-billion deal to save the embattled airline was due to be signed.If true, it would be a startling example of direct interference by Zuma in the business of a state-owned company.Bezuidenhout gave details of Myeni's phone call in an e-mail he sent to the SAA board and fellow executives last month.story_article_left1The e-mail, dated June 20, reads: "In the early hours of June 16 I received a call from the SAA chair, advising that the chair had received a call from the President on this matter."The e-mail, outlining the chronology of the negotiations with Emirates on the non-binding memorandum of understanding that was due to have been signed in Paris, was sent to Myeni; board members John Tambi, Tony Dixon and Yakhe Kwinana; and SAA executives Wolf Meyer, Barry Parsons and Sylvain Bosc.Bezuidenhout was left red-faced when, following Myeni's phone call, it was clear he did not have permission to sign off on the deal."I advised Emirates that we don't have complete unanimity at this time and that I do not want to be in contradiction with my chair on this matter," he said in the e-mail.Press releases to announce the deal had already been drawn up.Myeni this week failed to respond to questions seeking to establish, among other things, if she had in fact received a phone call from Zuma. She did not take calls or reply to text messages.Dixon said he was not permitted to comment, and Kwinana could not be reached.Zuma's spokesman, Harold Maloka, did not respond to detailed questions, only saying: "State-owned enterprises report to line-function ministers and not the president. They account to their respective ministers."SAA refused to discuss whether Myeni agreed with the statements in Bezuidenhout's e-mail. But the airline's spokesman, Tlali Tlali, denied the matter had ever been referred to Zuma."Should escalation have been necessary [to Zuma], this would have been done by the board through the shareholder minister [Nhlanhla Nene, minister of finance]."full_story_image_hleft1Bezuidenhout could not be reached for comment this week.Among the questions raised by his e-mail is whether Myeni was simply name-dropping and misled Bezuidenhout in her bid to scupper the deal. However, if the call from Zuma did take place, the president and Myeni clearly bypassed Nene.Two analysts this week suggested that involvement by the president, if true, would amount to interference and a violation of corporate governance.William Gumede, associate professor at the School of Governance at the University of the Witwatersrand, said: "If this is true then it undermines the King 3 code of governance, the Public Finance Management Act, as well as our own institutional arrangements of how things should be done."Gumede said state-owned enterprises were politicised and hampered by boards that often became too involved in operations, undermining management. "This causes absolute chaos because nobody knows who is really in charge. Who has the power? Who can make decisions, and whose decisions are going to be taken seriously?"David Couldridge, a senior analyst at Elements Investment Management, said the president's involvement would amount to "interference in the due process of a board"."Without reference to the specific state-owned enterprise requirements, executives would normally be able to contract up to a certain value or type of transaction with no further authorisation required."A partnership deal with another airline is material and would require board approval," he said.story_article_right2Nene's office this week said that because the Emirates/SAA deal was a non-binding memorandum of understanding, it did not require the Treasury's approval.It remains unclear why Myeni wanted to block the deal or why she would engage Zuma. Myeni, who is chairwoman of the Jacob Zuma Foundation, openly flaunts her links with the president during her power struggles at the airline.Her tenure at SAA has been rocked by controversy, including her public defiance of Public Enterprises Minister Lynne Brown.The proposed Emirates deal dates to January when the Dubai-based carrier submitted an unsolicited bid for an expanded code-share arrangement that would give SAA the benefit of Emirates's global reach by allowing SAA to sell tickets on Emirates flights.Tlali said the board was still considering the deal, but needed to satisfy itself that all procedures were followed.The Sunday Times has established that the issue has strained relations between Myeni and her management team, most of whom were absent this week.Bezuidenhout and Meyer, who is chief financial officer, were away on what an insider called "gatvol leave", while Parsons, the company's chief strategy officer, resigned on Friday.In his resignation letter, seen by the Sunday Times, Parsons said: "There are good people at SAA and I think they would be absolutely appalled if they were aware what transpires at the board."The SAA board on Friday appointed an investigator to look into the incident in which Meyer sneaked a recording device into a meeting with Myeni earlier this month, as reported in last weekend's Sunday Times.skitis@sundaytimes.co.za..

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