Gigaba interfered in SAA over Gupta-linked airline, Cheryl Carolus says
Malusi Gigaba got involved in the operation of the Joburg-Mumbai route in order to give it to Jet Airways, Carolus says
Former public enterprise ministers Malusi Gigaba interfered in the operation of SAA in relation to its Johannesburg to Mumbai route in order to give it to Gupta-linked Jet Airways, the former board chair of the state-owned airline, Cheryl Carolus, said on Thursday.
It was a Jet Airways carrier that flew Gupta guests to the Waterkloof Air Base in 2013 for the lavish Sun City wedding. This was one of the first incidents to reveal the extent of the Guptas’ involvement in state capture.
Carolus was testifying at the state capture inquiry on Thursday about the pressure SAA endured from Jet Airways, with the help of Gigaba, to cancel the airline’s route to Mumbai, India.
Carolus was SAA board chair from 2009 until 2012, when she and a number of the airline’s board of directors resigned.
Former public enterprises minister Barbara Hogan testified to the commission earlier in November that she was confused when she heard SAA was looking at cancelling the India route, because it was actually the ‘‘least loss-making’’ route.
She contacted Carolus, who told her, via a text message, that this was not true and that Jet Airways would be in SA for a meeting and was ‘‘lobbying hard’’ for SAA to end the Mumbai flight. The board, however, was not having that.
Gigaba replaced Hogan as public enterprise minister in late 2010. Hogan was axed by then president Jacob Zuma.
Gigaba resigned from President Cyril Ramaphosa's cabinet earlier in November following damning findings by the courts and public protector that he had lied under oath in the Fireblade Aviation matter.
Carolus testified on Thursday that within weeks of his appointment as public enterprises minister, Gigaba had called SAA to a meeting.
Carolus was unable to attend and sent CEO Siza Mzimela and another board member to the meeting. She was then given a report about what transpired.
According to Carolus, when the SAA officials arrived at the meeting with Gigaba, they were told to wait for another three gentlemen to join them. After a three-hour wait the president of Jet Airways and two others arrived.
The Jet Airways president took over the meeting while Gigaba sat back saying nothing, and insisted that SAA cancel its Mumbai route, she said.
Gigaba did nothing as the Mzimela tried to explain why SAA would not get off the route. Eventually Gigaba's deputy Ben Martins had to intervene.
Carolus said SAA made it clear that it would consider reasonable proposals from Jet Airways that made business sense, and followed due processes.
When asked by commission chair deputy chief justice Raymond Zondo if this was strange, Carolus said: “Yes it is very strange. And there the shareholder minister [Gigaba] was sitting”.
In April 2011, Carolus was again called to a meeting with Gigaba in Cape Town. Again Carolus could not attend and sent Mzimela, accompanied by a board member.
On arrival the SAA officials were told the minister wanted to discuss the Mumbai route, among other things. Gigaba once again took a back seat at this meeting and allowed his legal adviser, Siyabonga Mahlangu, to lead, Carolus said.
“Then Mahlangu proceeded to berate Mzimela for SAA’s refusal to close the Mumbai route and among other things [said] to her SAA is wasting government money, which could be spent on RDP houses,” she said.
Gigaba then said other people would be joining the meeting, and the Jet Airways president appeared once again.
Carolus said that at the conclusion of the meeting, Gigaba asked that SAA and Jet Airways “please find each other”.
“We found it quite peculiar at the time. The minister is our shareholder, and he seemed to be quite persistent to assist SAA and Jet Airways to find one another. As a shareholder you are not about … [helping] the other side, and it was clear he was in discussions with Jet Airways in a way that he wasn’t with us,” she said.
“The appropriate way it would have happened is one business approaching the other — it shouldn’t have gone to the department because the department is not the trading partner.”
Carolus said SAA did not get any proper proposals to close the route.
She said SAA had four flights a week to Mumbai, and Jet Airways put in seven flights, and as a consequence both airlines suffered losses because of the competition.
In the end, Jet Airways abandoned the route and so did SAA, but Carolus said she did not know what eventually led to the national carrier doing this.