Tryphosa Ramano. Picture: BUSINESS DAY
Tryphosa Ramano. Picture: BUSINESS DAY

Instability and disunity within the board of ailing state airline SAA are placing the continued tenure of deputy chairwoman Tryphosa Ramano in jeopardy.

Business Times has learnt that infighting between SAA chair Dudu Myeni and Ramano has become a matter of concern for Finance Minister Malusi Gigaba who, it is alleged, believes it has hurt the national carrier.

Ramano, who is expected by many to become chairwoman when Myeni departs in two weeks' time, could also find herself out in the cold, Treasury insiders say.

"The minister is not happy about it, as they can't do things that require intervention as long as they are so busy dealing with each other," said a source. "Both are stubborn and it's unhealthy that they can't put their issues aside for the sake of the airline."

Gigaba's displeasure with Ramano and Myeni, say Treasury sources, centres on his recent discovery that the new board failed to act on two investigative reports, one by EY and the other by law firm Edward Nathan Sonnenbergs, which identified critical areas in which SAA could make savings.

Under pressure: South African Airways chairwoman Dudu Myeni’s bid to have a compliance ruling set aside has been dismissed with costs by the Companies Tribunal. Picture: ESA ALEXANDER/ THE TIMES
Under pressure: South African Airways chairwoman Dudu Myeni’s bid to have a compliance ruling set aside has been dismissed with costs by the Companies Tribunal. Picture: ESA ALEXANDER/ THE TIMES

Severe losses

The reports were commissioned by Myeni's previous board to probe severe losses, but received a lukewarm reception from the new board, which questioned Myeni's intentions as well as the involvement, as coordinator, of her right-hand man, Nick Linnell.

"There was hesitation because we did not know whether she was fighting her own battles. Linnell's presence further muddied the waters. As you know, he is the chairwoman's fixer and he is not even a lawyer so we questioned his role and asked for him to be removed."

The minister's intervention has included ordering SAA to process both reports by the end of the month, said spokesman Mayi-hlome Tshwete. "There are issues raised in the reports that could have been resolved as early as last year," Tshwete said. "Given the condition that SAA is in, one would have imagined that everybody sitting around the table had one focus and objective."

An SAA insider described how, since receiving the reports last year, the board led by Ramano had "kicked the matter into touch".

Toughness

At the time of the new board's announcement last September, Ramano was praised for her toughness, with some Treasury insiders saying they expected her to "take Myeni on". Her appointment as deputy was seen as a compromise to avoid embarrassing Myeni, with the understanding that she would take over from Myeni next month.

However, at least three SAA insiders this week said her no-nonsense approach seems to have rubbed other board members up the wrong way.

According to a Treasury source, the finance minister laid the blame for the suppression of the reports at her door.

This unhappiness places Ramano's continued tenure on the board in jeopardy.

Tshwete would not be drawn on Ramano's position, saying only that the minister had been asked about unity within the board at SAA's appearance before parliament last week.

"He said he hoped the board was working together. It would be very disappointing if, in an environment where a lot was being put on the line for SAA in terms of resources, time, and energy, the board wasn't doing all it could to ensure it was working as a unit to strengthen the airline's position."

Tshwete refused to confirm whether specific board members had approached the Treasury, saying: "We have engagements with various members of the board, and they raise various issues. I don't want to get into specific details. Those are issues that we as the shareholder have to resolve with the board."

Malusi Gigaba speaks with journalists at the World Economic Forum on Africa 2017 meeting in Durban, South Africa.  Picture: REUTERS
Malusi Gigaba speaks with journalists at the World Economic Forum on Africa 2017 meeting in Durban, South Africa. Picture: REUTERS

Stepped in

Last month the government stepped in with a R2.3-billion bailout from the National Revenue Fund - a fund reserved for unavoidable emergencies such as natural disasters - when SAA was in danger of defaulting on a loan repayment. The Sunday Times has reported that as executives scrambled to find the money, Ramano was leading an attempt to have Myeni removed after she missed up to eight board meetings.

Pay cuts

So dire is the financial situation that the airline last week told parliament its executives would take pay cuts as it was negotiating to extend payment of July invoices with 20 suppliers.

The airline recorded a loss of almost R1.4-billion in the first quarter against a budgeted loss of R813-million. It now faces the prospect of more than R6-billion in loans maturing at the end of September.

In 2014, Ramano survived a very public and nasty falling out with former PPC Cement CEO Ketso Gordhan during her tenure as the company's chief financial officer. The battle resulted in Gordhan leaving the company after PPC's board refused to allow him to fire Ramano.

Ramano could not be reached for comment on Friday as she was in a special board meeting.

Myeni declined to comment, saying: "You have not given me reasonable time to respond to an extensive amount of information required to deal with your questions."

Business Times had sent her the questions at noon on Friday.

SAA spokesman Tlali Tlali said: "The board has looked into those reports and concluded that, as matters stand, they are incomplete.

"The process of finalising the reports, including soliciting input from all affected parties and executive management, has since commenced.

"This is not only standard practice, but a requirement in accordance with principles of natural justice," he said.

skitis@sundaytimes.co.za

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