Dudu Myeni stood firm against SAA/Airbus swap, court hears
Johannesburg - Former SAA board chairperson Dudu Myeni allegedly refused to sign the SAA/Airbus swap transaction despite being warned by former finance minister Nhlanhla Nene to do so.
She allegedly also ignored SAA’s own internal legal opinion, which advised her to sign the deal or face liquidation.
SAA lawyers warned that failure to sign the deal would introduce “a new risk of a breach of agreement, and consequently a potential trigger of material adverse effect and potential cross default under the funding and aircraft lease agreements”.
This was revealed in the North Gauteng High Court in Pretoria on Tuesday, where Myeni is defending herself against an application by Outa (The Organisation Undoing Tax Abuse) and the SAA Pilots Association (Saapa) to declare her a delinquent director.
The parties allege Myeni was responsible for plunging the national airline into a financial crisis.
On Tuesday, Outa and Saapa’s legal counsel advocate Carol Steinberg produced correspondence between Myeni and Nene about the swap transaction.
Nene had officially approved the deal in July 2015, in which SAA would lease five A330 aircraft from Airbus - a 12-year deal. The aircraft would have been used on international routes between Joburg and Dubai plus other European countries, and would include London via Ghana.
It was a conditional deal - South Africa would have been required to pay $17million and an additional $100m should they renege on the transaction.
He approved the deal in July, but Myeni allegedly then refused to sign.
In December, Nene warned: “As SAA currently does not have the funds to meet these payments, there is a high risk of the airline defaulting. A default on the government guarantees would have much broader negative ramifications for the sovereign and the country.”
He made the remarks after Myeni allegedly made a failed attempt to persuade him to alter the original SAA/Airbus swap transaction.
She apparently wanted the government to approve the involvement of the African Aircraft Leasing Company in the deal.
The court also heard that Myeni had already written to Airbus bosses and “unlawfully” informed them about the involvement of the African aircraft leasing company.
Nene rejected Myeni’s proposed deal. He was adamant in his letter that Myeni and her board had failed to provide him with information that explained how their alternative deal would cure the financial woes of SAA.
In her reply on the failure to sign the deal, Myeni said she did not want a repeat of what happened to SAA in 2001, during the tenure of Coleman Andrews, when SAA’s entire fleet was sold and later leased back to them.
The trial continues.