Labour Law News South Africa

Urgent application is not urgent - SAA boss

South African Airways (SAA) acting CEO Musa Zwane has dismissed the urgency of suspended treasurer Cynthia Stimpel's court application to halt a disciplinary hearing against her, and defended the airline's acting chief financial officer's actions in light of warnings about a dodgy deal with an unknown financier.
Urgent application is not urgent - SAA boss
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Stimpel stands accused of breaching SAA's code and ethics after she leaked documents to the Organisation Undoing Tax Abuse (Outa) that it used to institute court action against the airline in a bid to halt the carrier's suspect debt financing deal with BnP Capital.

BnP Capital had stood to make more than R200m from the deal in which it was hired to restructure SAA's debt and source R15bn in financing for the airline. However, it later emerged that BnP Capital's licence was suspended by the Financial Services Board.

In her founding affidavit, Stimpel revealed that she had made repeated calls to SAA acting chief financial officer Phumeza Nhantsi, flagging procedural flaws about the deal, as well as highlighting her discomfort about the cost implications for the airline when it could source the same services at a cheaper rate.

In his papers, Zwane said that Nhantsi denied Stimpel's claims that the treasurer was concerned about the process followed in inking a deal with BnP Capital, and it was clear from their e-mail exchanges that the treasurer was mostly concerned about the price.

SAA also disagrees that Stimpel's disclosures were protected.

Zwane also said that Stimpel's application to the Labour Court in Johannesburg was not urgent because she created the urgency by not filing for relief weeks ago.

Stimpel was suspended on 12 July 2016 and brought the application on 1 August, Zwane said.

In addition, Stimpel "did not make a protected disclosure" and that the disciplinary inquiry "is not related to any protected disclosure the applicant may have made".

Rather, she was suspended, he said, so that SAA could "investigate allegations that she had removed confidential documents and disclosed their contents without the necessary authorisation".

The acting CEO also said there was "not enough time to follow the standard procurement process to find an agent to source that amount of funding to fund the payment of loans maturing at the end of June 2015 (sic)".

It made "business sense to appoint BnP to assist in raising the funds as it was already steeped in (SAA's) financial affairs and was best-placed to assist SAA".

In its legal papers filed to a separate court, Outa had alleged there were 19 breaches of the airline's supply chain management that contravened sections of the Public Finance Management Act and the Preferential Procurement Policy Framework Act in the deal.

SAA eventually pulled out of the deal.

In Stimpel's affidavit, she said the airline's actions to discipline her made no sense as it only investigated the BnP deal after she blew the whistle to Outa.

Stimpel also argued that she felt forced to approach Outa.

This, she said, was after almost six months of warning Nhantsi about what was wrong with the BnP deal. She also argued that the disclosures she made were under the Protected Disclosures Act.

"Despite this, it is now apparent that SAA is intent on disciplining me for this very conduct, even though it prevented SAA acting unlawfully, and even though it prevented unlawful and unnecessary expenditure of public funds to the tune of R250m," she said.

The matter was postponed in the Labour Court to 22 August.

Source: Business Day via I-Net Bridge

Source: I-Net Bridge

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