Johannesburg - The shroud of mystery around the suspension of acting SAA chief executive Vuyisile Kona thickened on Tuesday with little comment from relevant authorities, while the union aligned to the parastatal stopped just short of wishing him good riddance.
The national airline played its cards very close to its chest on Tuesday, saying it was not prepared to give more details than its terse statement on Monday night. But SAA spokesman Tlali Tlali told Business Report that Kona was suspected of contravening the Public Finance Management Act.
“The substance of suspension relates to the contravention of the act during some procurement processes,” he said.
The SA Transport and Allied Workers Union (Satawu) pointed out that Kona had “a dark cloud hovering above his integrity”. It questioned his honesty, managerial competency and other skills needed to head a state enterprise.
In 2011, Kona was a trustee of Trilinear Empowerment Trust, the administrator of workers’ provident funds involved in the disappearance of R130 million belonging to Southern African Clothing and Textile Workers’ Union pensioners. Trilinear had allegedly signed a loan agreement with a third party, Canyon Springs, without informing the trustees of the provident funds. Canyon Springs was unable to pay back the workers’ money and the trustees applied for liquidation.
On Monday, SAA’s board of directors announced that certain allegations had come to its attention and as it undertook its investigation, Kona had been suspended immediately.
Kona, whose mandate was to “stop losing taxpayers’ money” and let the press hold the company accountable for its actions, was appointed as the acting chief executive in October 2012 following the departure of Siza Mzimela.
On Tuesday, even the Department of Public Enterprises, which is the company’s shareholder, would not answer any further questions on the issue.
This left the opposition DA demanding explanations from Public Enterprises Minister Malusi Gigaba, saying that the manner in which Kona had parted ways with SAA was troubling – especially as he was the third boss of the company since 2009.
DA spokeswoman on public enterprises Natasha Michael said: “SAA is a public entity funded in part by public funds. It is therefore not acceptable for the board of SAA to offer no explanation as to what motivated such a significant executive decision. How can Parliament hold the executive accountable for its decisions if they are kept in the dark?”
Satawu alleged that Kona had appointed his friends to strategic positions, sidelining senior managers in their roles, and the union blamed him for recent labour unrest at SAA.
Gary van Staden, a political analyst at NKC Independent Economists, said that in the current political climate it had become difficult to tell whether people were being suspended because they were not doing their jobs or if it was because of governance challenges or their clash with the government.
Van Staden asked: “Some of those things happened some time ago, why take action now?”
The tensions he referred to included the SAA board’s overturning of Kona’s decision to recognise the new trade union at SAA, the National Transport Movement.
This displayed deep disunity within SAA’s leadership, such that the union leaders told Business Report that the chief executive was just “a puppet” at SAA.
But Van Staden said if Kona’s suspension was based on underperformance it was “most welcome” as there was a need for broader action at all government entities.
“All state-owned enterprises in South Africa are in dire need of a serious shake-up. They often do their own thing and it doesn’t even matter because they will be bailed out,” Van Staden said.
Mike Schussler, the chief economist at Economists.co.za, said national carriers around the world were struggling and many of them had been privatised. Even though the recent events at SAA had hurt its image, they were more of local concern and unlikely to become an international topic when SAA needed to maintain its competitiveness.
“But what this means is SAA will have to have a financial turnaround and up its game totally,” Schussler said.
He added that as taxpayers had to bail out SAA a few times, consumers were rightly worried they were not getting value for the money they were putting into the national carrier.
“We are not worried that [SAA] is going to fall out, but there is a worry about the service levels. We need a national carrier that does not need a bailout but one that operates like a private airline and makes money instead of wanting it from us. So whether the current chief executive stays or whoever comes in as a new chief executive, that should be their first priority,” Schussler said.