Finance Minister Mlusi Gigaba File picture: Bongani Shilubane/ANA

Parliament - Finance Minister Malusi Gigaba said on Wednesday he would seek further legal opinion on whether his decision to extend the term of South African Airways chairwoman Dudu Myeni is above board after MPs raised concern that he did not have the power to do so without Cabinet approval.

Gigaba was grilled about it by Parliament's standing committee on finance after parliamentary legal adviser Frank Jenkins disagreed with the view of Deputy Finance Minister Sibusiso Buthelezi that SAA's memorandum of incorporation allowed the minister to take a unilateral decision in this regard.

Myeni's term was due to end on August 31, but Buthelezi confirmed that the minister extended it until the loss-making carrier's annual general meeting in November.

MPs asked whether Cabinet had approved Gigaba's decision and said had it not, the extension would be irregular.

Read: Extending Myeni's term as SAA chair illegal: MPs

Jenkins said the deputy minister's assertion that a suspensive clause in the memorandum of understanding empowered the minister to extend her contract was false, as this clause only kicked in if all non-executive members of  the board had left at once.

"In the light of that ... you cannot just single out the chairperson," he said, and was then asked by MPs to draft a formal opinion.

South African Airways chairwoman Dudu Myeni. PHOTO: ANA

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.

Appearing before the committee later in the day, Gigaba told MPs: "If there is desire to seek a different response to the ones provided by the deputy minister. I stand by the responses."

He reiterated that he had consulted lawyers before he extended Myeni's term, and said he would again consult with them to get their view on Jenkins's opinion.
"We think it is a matter of legal opinion, we will seek our own legal counsel on the matter of the chair. We will revert back to check the opinion that we had received against the opinion of the legal advisor of the committee."

Gigaba was challenged by former Cabinet colleague Derek Hanekom who said the clause was so simple, there was no need to consult lawyers, and asked the finance minister to read it again himself.

"We would appreciate the minister to look very carefully at that. A good reading will lead one very quickly to whether the appointment was a legal one or not."

Gigaba, however, insisted that it was a matter for lawyers.


He left the committee before Jenkins returned but urged MPs not to consider the case of the chairwoman as an isolated one, but part of wider attempts to bring stability to SAA."

"I would request that the committee does not treat this matter individually. There is a comprehensive approach we are taking to SAA
What I have asked the department to do is a comprehensive evaluation of the current board and a skills audit of the board."

Earlier, 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.

Myeni has served on the board of the airline for eight years. She 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 said National Treasury was meeting regularly with lenders to ensure that the loans not be called in, and an understanding had been reached with the majority.

Gigaba and Buthelezi on Wednesday announced that they would table a special appropriations bill at the end of the month to give R10 billion to SAA.
 
African News Agency