We’re waiting for the court judgment on Dudu Myeni

If our application succeeds, Myeni will not be allowed to serve on any board in future.

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06/03/2020 12:22:05

                                                                                                                                                                                                            We’re waiting for the court judgment on Dudu Myeni

                                                                                                                                                                                                            OUTA and the SAA Pilots’ Association (SAAPA) are trying to have former SAA chairperson Dudu Myeni declared a delinquent director. We believe she made decisions – without approval and against her board’s judgment – that cost SAA billions of rand.

                                                                                                                                                                                                            Hearings into whether Dudu Myeni is a delinquent director continued in the Pretoria High Court during February. Argument from both OUTA-SAAPA and Myeni was heard on 28 February and judgment was reserved.

                                                                                                                                                                                                            In closing arguments, lawyers for OUTA and SAAPA called for the Pretoria High Court to declare former SAA chair a delinquent director for life, not just the minimum seven years.

                                                                                                                                                                                                            Myeni’s lawyers opposed this, arguing that the case had not been proven.

                                                                                                                                                                                                            The OUTA-SAAPA heads of argument were 187 pages. The Myeni heads were 22 pages.

                                                                                                                                                                                                            SAA is currently under business rescue, routes have been cancelled and thousands of jobs are threatened. From 2009 to 2017, Myeni was the one constant on a constantly rotating SAA board. From 2012 until her departure in 2017, she was the chair. SAA was technically insolvent since 2012/13.

                                                                                                                                                                                                            “Her misconduct is severe, going to the heart of a director’s duties under the Companies Act, the common law and the PFMA. In her actions and in these proceedings, Ms Myeni has repeatedly demonstrated gross dishonesty. Ms Myeni has shown no contrition or remorse for her conduct. Quite the opposite, her evasions and attempts to pass the buck to others through constant appeals to the ‘collective’ are indicative of a person wholly unsuited to ever be entrusted with responsibility as a director. Ms Myeni represents an ongoing threat to the public and shareholders, as reflected by her existing directorships of no less than four different companies, including at least one parastatal, Centlec,” argued OUTA-SAAPA’s Advocate Carol Steinberg.

                                                                                                                                                                                                            OUTA-SAAPA called for the court to award costs against Myeni on a punitive basis, due to her “dishonesty and evasiveness” including dishonesty with the court when attempting to explain her initial failure to appear in court.

                                                                                                                                                                                                            “The mystery remains as to why Ms Myeni repeatedly took SAA and the country to brink.  Her motives will only be revealed by following the money trail.  Some of this work has begun in the Commission of Inquiry into State Capture, which has revealed further, shocking allegations of corruption and money laundering involving Ms Myeni and her cronies,” said Steinberg, calling on the court to refer the matter to the National Prosecuting Authority.

                                                                                                                                                                                                            OUTA-SAAPA argued that Myeni “blocked, delayed and obstructed” key initiatives to turn the airline around, breaking the law and flouting basic governance principles.

                                                                                                                                                                                                            The case revolved around two key matters from 2015: SAA’s failed attempt to sign a memorandum of understanding (MOU) on route sharing with Emirates airline and the Airbus swap transaction. Evidence was that a deal arising from the MOU would have brought SAA a guaranteed minimum of USD 100 million per year, while the Airbus swap transaction was aimed at saving SAA hundreds of millions of rand in bills and providing more fuel-efficient aircraft.

                                                                                                                                                                                                            OUTA-SAAPA did not bring evidence on additional incidents outlined in the original case against Myeni, due to time limits and the belief that the two main incidents provided sufficient evidence, but emphasised this did not concede any weakness in those allegations.

                                                                                                                                                                                                            OUTA-SAAPA called six witnesses against Myeni, included four former SAA executives. Myeni was the only witness in her own defence.

                                                                                                                                                                                                            Myeni’s lawyer, Advocate Nqabayethu Buthelezi, called for the court to declare the case “wholly misconceived and frivolous”.

                                                                                                                                                                                                            He argued that the evidence did not support the allegations, there was no proof that Myeni had acted on instructions from then President Jacob Zuma to block the MOU, which thus invalidated all allegations on that matter, and that the “alleged forfeited benefits were never proven”. He argued that the Airbus swap transaction claim was based on “multiple fatally flawed premises”.

                                                                                                                                                                                                            Buthelezi argued that OUTA had no legal standing to bring the case. An earlier motion on this was denied by the court.

                                                                                                                                                                                                            “In this case, all the evidence revealed are typical boardroom battles over business strategy and personality clashes. There is no conduct directly attributable to fit the description of gross negligence and wilful misconduct. Even the possible errors of judgment conceded by the First Defendant (Myeni) are in essence bona fide errors of judgment and do not amount to gross negligence or wilful misconduct,” said Buthelezi.

                                                                                                                                                                                                            The OUTA & SAAPA heads of argument are here.
                                                                                                                                                                                                            The Myeni heads of argument are here.

                                                                                                                                                                                                            Read more about OUTA and SAAPA’s case against Myeni here

                                                                                                                                                                                                            Picture: OUTA

                                                                                                                                                                                                            OUTA is a proudly South African civil action organisation, that is purely crowd funded. Our work is supported by ordinary citizens who are passionate about holding government accountable and ensuring our taxes are used to the benefit of all South Africans.