South African Airways chairperson Dudu Myeni. PHOTO: ANA

Parliament - Members of Parliament's standing committee on finance on Wednesday raised serious concern about the legality and the wisdom of extending Dudu Myeni's term as chairwoman of South African Airways.

Director general of finance Dondo Mogajane confirmed that Finance Minister Malusi Gigaba asked Myeni to remain at the helm until the struggling carrier's annual general meeting in November.

This sparked questions as to whether Cabinet approved the extension, and Deputy Finance Minister Sibusisu Buthelezi conceded that Cabinet was not consulted. He said, however, that it was the ministry's understanding that SAA's memorandum of incorporation empowered the minister to take a unilateral decision to extend the term of the chairperson.

Parliamentary law advisor Frank Jenkins disagreed. He said the MOI only allowed the minister to act in this manner when the terms of office of all non-executive members of the board expired at once.

"In the light of that ... you cannot just single out the chairperson."

Buthelezi said National Treasury had not wished to act illegally but added that other lawyers may reach a different conclusion to Jenkins, and the ministry's did in this instance.

Dissident ANC MP Derek Hanekom reminded Buthelezi that it was standard practice to take decisions such as these to Cabinet for approval.

Fellow ANC MP Thandi Tobias rejected the ministry's stated motivation for the extension -- to ensure continuity up to the AGM -- and said it appeared that the committee was not being told the true reason. 

"For now, as it stands, it is not the AGM that we can use as an excuse," she said, before proposing that Jenkins be asked to draw up a formal opinion to give to the treasury.

Democratic Alliance MP Alf Lees noted that SAA's lenders were loathe to extend the airline's loans further, for as long as Myeni served as chairwoman.

"Lenders are reticent about rollovers when Ms Myeni remains. That should influence our recommendation about whether Ms Myeni stays on," he said.

Economic Freedom Fighters (EFF) chief whip Floyd Shivambu agreed: "I think it is one of the most important issues." 

It was Shivambu who had raised questions about the legality of Myeni's further tenure. He said there no possibility Cabinet could step in to confirm Gigaba's decision as she had already served a maximum of three terms.

Myeni was re-appointed by former finance minister Pravin Gordhan, with the proviso that it would be for a single term. It was widely believed that he acted under pressure from President Jacob Zuma.

Myeni has persistently blamed SAA's financial woes on decisions taken decades ago under apartheid. The airline is reliant on loans guaranteed by the government to remain operational, and Lees pointed out than a portion of its debt was due to mature in September.

Buthelezi confirmed that National Treasury was meeting regularly with lenders to ensure that the loans not be called in.
 
African News Agency