MTN bribe accused to pilot new airline

25 January 2015 - 02:00 By Tina Weavind
PROBED: Yusuf Saloojee
PROBED: Yusuf Saloojee

Former South African ambassador Yusuf Saloojee, the man who was allegedly bribed by an MTN official in Iran, has emerged as the chairman of South Africa's newest low-cost airline, Pak Africa Aviation, which is due to be launched next month.

Pak Africa, which will operate as Skywise, is the fourth new airline in two years planning to take to local skies. Some of these new airlines have linked arms with controversial individuals (see sidebar).

The airline, which emerged from the corpse of 1time, is 80% owned by South Africans, including the powerful Mandela family. The other 20% is owned by Pak Africa CEO Tabassum Qadir.

But it is the involvement of Saloojee, who was suspended from his ambassadorial post in Iran in 2012, that will raise eyebrows.

He was at the centre of an explosive corruption scandal in 2012, when rival Turkcell accused MTN of bribing officials in Iran to score a lucrative $4.3-billion (R57.6-billion) cellular licence deal, which gave it 49% of Irancell.

Saloojee got the equivalent of $200 000 from MTN's Iran executive, Chris Kilowan, allegedly as a bribe for helping MTN secure the deal.

Saloojee used the money to buy his wife a house in Pretoria.

MTN later initiated a probe, the Hoffman commission, into the corruption claims, which found that there was "no doubt" that Kilowan "lent" R1.4-million to Saloojee to buy the house in Pretoria in April 2007, but said this was not done with MTN's blessing.

"Saloojee agrees that he borrowed the money, but says that it was a private agreement and that he repaid half in cash almost immediately and the rest on demand a year later," the report said.

However, a KPMG forensic audit found that MTN had given Saloojee an Ericsson P900 cellphone worth about R5000. It also lavished many gifts on Iranian politicians, including diamond cufflinks, free cellphones and stays at Sandton's The Michelangelo hotel.

An investigation by Saloojee's former employer, the Department of International Relations and Cooperation, has still not reached a conclusion. Department spokesman Clayson Monyela said this week that the case was still open.

"We are still waiting for responses to several questions that were put to [Saloojee]," he said.

Saloojee claimed to be surprised that this investigation was still open. In addition to the Hoffman commission finding, he said, "the fact that the suspension was lifted speaks for itself". No charges were ever laid. "There was no evidence."

This week, Sain Malik, the deputy chairman of Pak Africa, defended the company's choice of leader, saying Saloojee's past was irrelevant.

Malik said: "It is like being married - would we be interested in whether he is married?"

Saloojee's connection with Pak Africa stems from his time from 2004 to 2008 as ambassador to Iran, where he was deeply involved with "creating business ties" between the two countries.

He told Business Times that Pak Africa approached him after his retirement from ambassadorial duties in 2012, and asked him to head the operation.

Pak Africa is a private equity company with interests in the textile and property industries and with offices in Zimbabwe, Nigeria and South Africa. Skywise plans to become a pan-African airline.

According to Qadir, the airline is not dead set on offering low-cost flights. Asked what sort of fares were likely, she said: "Less price with more value. We want to focus more on consumers' benefit rather than competitors' detriment."

Malik would not detail the source of funding for the airline, other than to say it was from a "consortium of high net worth individuals in the Middle East and Africa".

It has emerged, however, that the local shareholders include the Mandela family.

Former president Nelson Mandela's grandson, Prince Zinhle Dlamini, is a director of the airline, which also has close ties to the Thembekile Mandela Foundation, founded by Ndileka Mandela, Mandela's eldest granddaughter.

Pak Air Aviation will celebrate its launch by flying matriculants adopted by the Mandela Foundation.

Malik this week confirmed that the Mandelas were shareholders. But he defended the inclusion of the politically powerful family in the consortium by saying: "My mother also says I am powerful."

Pak Africa merged with failed airline 1time, and then spent R21.6-million buying a company called Global Aviation Operations, which had a valid airline operator's certificate.

The Company They Keep

Pak Africa is the latest in a slew of new airlines with links that do not inspire confidence. They include:

Flyafrica, an ambitious regional upstart with local aspirations connected to billionaire arms dealer and ANC financier Ivor Ichikowitz;

London-listed Fastjet, which tried to set up shop in South Africa in 2012 using a BEE company, Blockbuster, run by Jacob Zuma's son, Edward, and controversial tobacco dealers Paul de Robillard and Yusuf Kajee. The idea was shelved; and

Flysafair launched with rock-bottom fares but was temporarily grounded when it ran into trouble over its shareholding structure, involving Irish owners ASL. This has since been resolved.