Fasten your seat belt: state capture inquiry turns to the skies

13 June 2019 - 10:56 By AMIL UMRAW
An SAA aircraft on the runway at OR Tambo International Airport.
An SAA aircraft on the runway at OR Tambo International Airport.
Image: Gallo Images / The Times / Alon Skuy

The state capture inquiry turns its attention to corruption and mismanagement in South Africa's aviation sector on Thursday, with the spotlight on South African Airways (SAA) and its sister company SA Express.

This leg of evidence will continue until the end of June, with a second phase expected later this year.

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Addressing deputy chief justice Raymond Zondo on Thursday, the commission's legal team member, advocate Kate Hofmeyr, said the upcoming evidence would focus on four aspects and included up to 15 witnesses.

The first aspect will be SAA's controversial R15bn capital-raising endeavour, which the company embarked on during 2015 and 2016.

The second is an arrangement entered into with SA Express by the North West's transport department to fly routes to Pilanesberg and Mafikeng airports. Hofmeyr said the agreement was envisaged to move R400m out of the North West government into SA Express and a third party that SA Express nominated to conduct ground-handling services at those airports.

The commission believes R97m of that amount was paid out of the North West government and siphoned off through a "detailed scheme of money laundering". Among those expected to be implicated is former North West premier Supra Mahumapelo.

The third aspect relates to a contract that EML Energy procured with SA Express, which appointed the energy company to supply 18 times more fuel at Pilanesberg airport than the airport could use. The evidence will focus on alleged fraud and corruption in the process of EML Energy securing funding from the Industrial Development Corporation.

The fourth aspect includes evidence relating to the extent of interference from shareholder level in the public enterprises minister’s office and at board level in the management functions within SAA; "the culture of intimidation and threats" that pervaded while Dudu Myeni was chair of the SAA board; and how members of the board instructed managers to conclude certain contracts without proper processes being followed.

The first witness due to testify on Thursday is former SAA head of financial risk management Cynthia Stimpel.