Inquiry hears that ‘Myeni’s person’ ran the show at SAA
Former CFO Phumeza Nhantsi tells Zondo commission she was ordered to take instructions from the Dudu Myeni’s adviser for key multibillion-rand deals
A former SAA CFO was instructed by the airline’s erstwhile boss Dudu Myeni to call her personal adviser, who was not employed by the state entity, for advice on a multibillion-rand transaction.
This was indicative of the absolute power Myeni wielded over the embattled airline, which missed the deadline to submit its financials for 2014/2015 and the subsequent financial years during her controversial tenure.
Phumeza Nhantsi, a qualified chartered account, was permanently appointed as CFO on May 1 2017, the state capture commission chaired by deputy chief justice Raymond Zondo heard on Tuesday.
Nhantsi detailed how Myeni gave her the contact details of her personal assistant, Masotsha Mngadi, two days into her new job, motivating that Mngadi was the right person to talk to regarding a deal to swap aircraft.
Mngadi was described as “Myeni’s person” by colleagues, she said. Nhantsi had been working at auditing firm SizweNtsalubaGobodo (SNG) when she was seconded to the national carrier on November 22 2015. “I was happy at SNG but I wanted to explore the corporate world.”
The swap deal dated back to 2002 when SAA awarded a R6bn contract to Airbus to modernise its long-haul and regional/domestic fleet by replacing much older aircraft over a 12-year period from 2003 to 2015.
However, the airline subsequently faced financial headwinds, prompting the board to renegotiate for the swap of 10 remaining A320 aircraft for five long-haul A330s.
Nhantsi told the commission that one of her responsibilities was to safeguard SAA’s assets and to act in the best interest of the company, which has an outstanding debt of R21.7bn. It has been operating at a loss and expects to make a profit only in the 2021/2022 financial year.
“Two days after I joined, the chair Myeni gave me the number of Mr Mngadi. She said he is her adviser and he knows about the swap deal,” said Nhantsi. “With the engagements I had with Mr Mngadi, he knew a lot about SAA [but] he was not paid via SAA’s payroll.”
When Nhantsi needed to prepare a letter for the board’s approval on the swap deal, which was to be sent to the finance minister, she received input from Mngadi on the letter, which she sent to the board for review. It was approved and sent to Treasury.
This prompted evidence leader advocate Kate Hofmeyr to ask Nhantsi if it was not strange that a third party was instrumental in preparing the letter. “It did ring a bell,” Nhantsi conceded. “But Ms Myeni told me: ‘Mr Mngadi is my person for any issue. He has got a deep understanding of SAA.’”
That Mngadi had also played crucial roles in a controversial R15bn capital-raising exercise to consolidate SAA’s debt during 2015/2016 was questioned by both Hofmeyr and Zondo.
Mngadi had also attended meetings where SAA’s precarious financial position was discussed, the commission heard. She found it odd that things falling under her portfolio were discussed without her input as she had not been part of some of the meetings.
“I felt I was swimming against the tide, the politics that came about. I was too naive to think the board members were always acting in the best interest of the company,” said Nhantsi.
Nhantsi told the commission that after joining SAA, Myeni told her that she, Myeni, was “very popular in the media”.
“She asked if I have read anything about her in the media … the chair told me that the reason people can’t pinpoint anything to her is because she doesn’t write anything down,” said Nhantsi.
She was fired from SAA last year after an internal disciplinary hearing found her guilty of gross financial misconduct, negligence and dishonesty.
Myeni, a close ally of scandal-prone former president Jacob Zuma and chair of the Jacob Zuma Foundation, was removed as SAA board chair in October 2017 and replaced by incumbent JB Magwaza.
In January, Angelo Agrizzi, the former COO of Bosasa, now African Global Operations, told the commission that Myeni received R300,000 a month from Bosasa, allegedly for the Jacob Zuma Foundation.
Agrizzi said the money for Myeni was always paid in cash and he knew this because he would have to “pack the money”. He was also present on a few occasions when Bosasa CEO Gavin Watson himself delivered the money to Myeni, he said.
Agrizzi explained how Watson once told him that he personally delivered money to Zuma and “put the bag next to him and asked him the question — ‘does Dudu give you your money every month?’ and the answer was yes”.
Myeni has applied to cross-examine Agrizzi over his evidence, but Zuma has not. Zuma has repeatedly questioned whether state capture “exists” and argues there is not a shred of evidence implicating him in corruption or wrongdoing.
Zuma has been asked by the commission to agree within five weeks to testify before it. However, his lawyer Dan Mantsha wants the commission to explain under which of the inquiry’s rules Zuma is being asked to testify.
The inquiry is empowered to subpoena Zuma to testify.