State capture: Dudu Myeni and SAA director wanted contracts handed over 'without following proper processes'

28 June 2019 - 17:56 By Amil Umraw
Former SAA chairwoman Dudu Myeni.
Former SAA chairwoman Dudu Myeni.
Image: Veli Nhlapo

Former SAA non-executive director Yakhe Kwinana and board chairperson Dudu Myeni allegedly instructed that 15% of the work on contracts relating to ground-handling services and jet fuel supply be handed over to a group of 60 local companies without following regular procurement practices.

Kwinana wanted to use a shell company, Quintessential Business Consulting, as an umbrella body under which the 60 companies would be contracted by SAA. This was to be done under the guise of transformation in SAA's contracting.

The companies would be handed a share of contracts relating to ground-handling services - at the time awarded to international consortium, Swissport - and jet fuel supply contracts awarded to Engen.  

But Kwinana and Myeni met with resistance from senior members at the airline who would not flout procurement processes.

This is according to former SAA chief procurement officer Masimba Dahwa, who told the state capture inquiry on Friday that Kwinana, and subsequently Myeni, put pressure on him to make the deal happen.

"Transformation became core and as such I was tasked to come up with an initiative to try to drive forward the transformation agenda. We went on some information-sharing roadshows where we were sharing with different potential suppliers, explaining to them how to do business with SAA. We dubbed them supplier engagement summits ... It was non-committal," he said.

Dahwa referred to e-mail correspondence from Kwinana on November 9, 2015.

"We had a supplier engagement summit in Durban. The chair [board chairperson Dudu Myeni] and Kwinana gave me listings of companies they wanted invited. We had a session of about 60 different companies ... When we were in those sessions we started talking about the issue of aggressive transformation," he said.

"At some point later, Kwinana wrote an e-mail saying she wanted me to award 15% set aside for the SwissPort Services and for Engen to the 60 companies that attended the supplier engagement summit. I explained it wasn’t possible because, legally, these were individual companies and it was difficult for us to say we are going to award to a group of 60 different companies.

"She responded to me saying I needed to set up a holding company to constitute those 60 companies. I told her that was not in the mandate of the CPO, and it was a fundamental breach of my duties. She told me she was going to do it herself ... We had challenges around that and unfortunately in all my efforts to explain to her ... She didn’t take it lightly. She felt I was defying her."

The commission's evidence leader, Kate Hofmeyr, read out the e-mail from Kwinana.

"The allocation of 15% to BEE was a board decision which has not been implemented. The board allocated the 15% to all BEE companies in the SAA database who have been knocking on SAA’s doors. The number of these companies is +- 60," the e-mail read.

"In the Sharks Board supplier engagement, the forum you were supposed to be at, it was agreed that SAA or Engen for that matter cannot sign an agreement with 30 companies and that they will be included as one company for ease of contracting ...What must happen is that the 15% must be implemented." 

Dahwa alleged Kwinana forwarded to him the name of a company, Quintessential Business Consulting, which she wanted as a "holding company that would represent that 60 companies that attended the Durban supplier engagement summit".

"I raised this specific concern with the head of legal. I asked her how I was going to be able to justify appointing a pre-selected entity without having gone out on open tender to procure the most cost-effective service provider for SAA," he said.

Dahwa described how added pressure was put on him by Myeni.

"I tried all tactics possible to evade signing the [letters of agreement]. I eventually informed them (Myeni and Kwinana) that there was some information pertaining to the matters that I required from other role players, and they were not available. They kept trying to pressure me to sign," he said.

Dahwa's testimony continues.