11 March 2009

South Africa: SAA Chief Khaya Ngqula Quits Amid Probe

Johannesburg — SOUTH African Airways (SAA) CEO Khaya Ngqula, who has been on special leave while being investigated for alleged mismanagement, is to leave the airline after agreeing on a settlement.

While SAA chairman Jakes Gerwel was tight-lipped about the size of Ngqula's settlement yesterday, it is thought that he could get a package of nearly R8m based on his current salary and taking into account that his six-year contract is due to run until the end of August next year.

This is likely to exclude the more than R1m in retention bonuses he would have to pay back due to his leaving before the end of his contract. The payout will only be made known in the airline's annual report later this year.

In a statement yesterday, Gerwel said: "It has been agreed between the parties that the terms of the settlement are confidential, but any payments will be reflected in the annual report in accordance with normal disclosure obligations."

SAA confirmed that the investigation into mismanagement would continue. Last month, a subcommittee established by the board of SAA appointed KPMG's forensic unit to conduct a forensic audit into allegations surrounding the airline, including the issue of retention premiums, conflict of interest and procurement.

Ngqula's decision to vacate the CEO's office was sparked by allegations made by the South African Transport and Allied Workers' Union in a dossier given to Public Enterprises Minister Brigitte Mabandla, detailing alleged wrongdoing by senior members of SAA management, Ngqula in particular. In response, the department gave the document to Gerwel, demanding urgent action by SAA's board.

Manie van Wyk, Democratic Alliance spokesman on public enterprises and a member of Parliament's public enterprises portfolio committee, said yesterday it was "unacceptable for SAA to reach an agreement on a package before the investigation has been completed".

Chris Smyth will continue to act as CEO while a search is undertaken for a replacement.

While Smyth remains a possible candidate, another name that has been mooted by industry insiders is SA Express CEO Siza Mzimela. SAA has given no deadline for the appointment of a permanent CEO.

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