Sunday, September 30, 2012

■ SOUTH AFRICA: New SAA boss announced as mass resignations preempt mass firings.

SAA logoIn a dramatic chain of events, the entire boardroom scene at South African Airways (SA) changed literally overnight, when eight of its 14 board members, including its chairwoman Cheryl Carolus, pre-emptively resigned their positions on Thursday evening, following a leaked media report earlier in the week that allured to looming dismissals at both SAA and its sister regional carrier, SA Express (XZ).

Carolus and six other non-executive board members - Bonang Mohale, Louis Rabbets, Jabulani Ndhlovu, David Lewis, Teddy Daka and Maggie Whitehouse - all resigned on Thursday, with one other board member, former Johannesburg Stock Exchange CEO Russell Loubser, having resigned on Wednesday this past week. All eight cited a lack of support from the South African Department of Public Enterprises (DPE), the government department responsible for overseeing SAA, SA Express amongst other parastatals.

In response, Minister of Public Enterprises, Malusi Gigaba, stated that he found the resignations and their timing "bizarre" but that he accepted them stating:
South African Airways Headquarters, Airways Park
SAA's Airways Park, Johannesburg
"The Minister finds the resignations and their timing bizarre. Particularly, that such resignations happened after prompt engagement of the board members by the Minister upon learning of the media leaks. The Minister condemns, in the strongest terms, the leakage of confidential government information.

However unfortunate the media leak may be, the insinuation that the said media leakage was caused or orchestrated by the Minister or the Department is both mischievous and ill-conceived. Further, the suggestion that the Minister or the Department, in the exercise of statutory duties, were actuated by malice or intention to injure the good names or reputation of the Board is equally misplaced. It is the Minister’s considered view that the particular media leakage is an abuse of free speech and the openness of our society.

It was always anticipated that the terms of the majority of Board members would come to an end at the upcoming AGM scheduled for 15 October 2012. In any event, it is a condition of appointment of the affected Board members that their appointment is subject to review by the Minister annually."

Carolus's sudden departure follows speculation that SAA would report a loss of more than USD120million and its low-cost carrier Mango a loss of USD12million for Financial Year 2011/2012, and a decision by Minister Gigaba to cancel SAA’s annual general meeting this week and his request to Parliament for a two-month postponement of the tabling of its annual report, which he blamed on the board; an accusation Carolus refuted:
I have a stamped receipt from the Department of Public Enterprises showing that the statements were received by them on August 31,” she said. “All that was outstanding was a letter from (the) Treasury indicating that it would support SAA if the oil price continued along its forecasted path.  “We would have received a qualified audit because of the uncertainty about government’s continued support.

On Friday afternoon, Gigaba moved to stabilize the South African national carrier by appointing Vuyisile Kona - a former head of subsidiaries at SAA who was  axed by controversial former CEO Khaya Ngqula in 2005 - as the new chairman. He also appointed Andile Mabizela, Andile Khumalo, Bongisizwe Mpondo, Dr Rajesh Naithani, Ms Carol Roskruge, Ms Raisibe Lepule and Ms Nonhlanhla Kubeka as new non-executive directors to complement the remaining members of the board.