Struggling for altitude: An SAA Boeing 747 jumbo jet. The airline’s growth rate has been slow relative to its major African and non-African competitors. Picture: BUSINESS DAY
Struggling for altitude: An SAA Boeing 747 jumbo jet. The airline’s growth rate has been slow relative to its major African and non-African competitors. Picture: BUSINESS DAY

The National Union of Metalworkers of SA (Numsa) is heading to court in a bid to recover damages from several senior SAA Technical (SAAT) executives for their role in alleged irregular purchases of ground power units.

"In 2016, SAAT sold all 12 of its GPUs [ground power units] to JM Aviation — a decision which resulted in a loss of over R5m," Numsa’s Phakamile Hlubi-Majola said in a statement.

"We believe that the decision to sell the GPUs was motivated by corruption because JM Aviation benefited at the expense of SAAT.

"Our allegation is based on the findings of the Open Water forensic report‚ which was finalised in May 2017," he said, referring to a report by the Open Water risk-management consultancy.

Numsa first made its demand that executives repay the more than R5m that SAAT lost in September 2017, when the report was made public.

According to Hlubi-Majola‚ the Open Water forensic report confirms that the sale of the ground power units was irregular and that proper supply chain management policies were not followed.

It also found that the sale exposed SAAT to "undue financial obligations".

"The GPUs were sold to JM Aviation for a price which is far below the market value. It is our firm belief that the sale was induced by corruption or bribery involving senior SAAT employees who may have colluded with executives from JM Aviation to effect the sale.

"Open Water found that SAAT suffered a loss of at least R5,128,687 and therefore we are demanding that SAA Technical claim that amount directly from the executives who have been accused by the report for the alleged role that they played in this irregular transaction."

Hlubi-Majola said Numsa was seeking a court order directing the executives and companies to pay SAAT back the money that was used to effect this transaction.

"In 2015 SAAT bought 12 GPUs for R11m‚ including shipping costs (each GPU cost approximately R800,000).

"In July 2016 SAAT then sold the GPUs for R2,976,000‚ at a cost of R248,000 per unit.

"At the time of the sale each GPU was worth at least R750,000‚ and its book value according to the SAAT register was R682,000.

"The purchase of these GPUs was irregular in that the person responsible for the SAAT asset register had not approved the disposal of all the GPUs‚" Hlubi-Majola said.

"The disposal was in contravention of Treasury regulation 16A7.1, which stipulates that the disposal and sale of assets must be at market-related value.

"Once JM Aviation had bought them they went on to sell the very same GPUs to Swissport.

"SAAT now leases the very same GPUs from Swissport at a rate of R550 an hour‚ demonstrating that the transaction was purely motivated by greed and corruption.

"The irregular sale of the GPUs is but one of the many examples of corruption at SAAT which the Open Water forensic report exposes."

SAA has decided to institute disciplinary proceedings. The case is set down for hearing in the South Gauteng High Court on June 28.

Please sign in or register to comment.