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Suspended treasurer takes SAA to court

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Suspended SAA treasurer Cynthia Stimpel has taken the national carrier to the labour court to avoid being punished for blowing the whistle on a dodgy finance deal.

She also wants to stop SAA from going ahead with a disciplinary hearing against her.

Stimpel’s affidavit reveals how the airline skirted procurement processes in selecting BnP Capital to restructure its R15 billion debt and raise funds in return for a R256.5 million success fee.

The BnP deal floundered and SAA cancelled it after it was made public that the Financial Services Board had revoked its licence.

Stimpel says she disclosed the information to the Organisation Undoing Tax Abuse (Outa), the Public Protector and National Treasury because she was concerned about the procurement process, the possible flouting of the Public Finance Management Act and the costliness of the proposed deal.

In an opposing affidavit, SAA argues Stimpel only went public after it instituted disciplinary proceedings against her.

It says Stimpel did not use the airline’s internal whistle-blowing mechanisms before she went to the three external parties.

SAA argued that she did not give National Treasury and the Public Protector enough time to investigate her claims.

Treasury officials followed up on her submissions, so the disclosure to Outa was unwarranted, SAA added.

Stimpel is also accused of sending a defamatory SMS to a colleague suggesting the SAA board had sent out a “nonsensical statement” after the resignation of former Mango CEO Nico Bezuidenhout.

The case was scheduled to be heard this week in the labour court, but was postponed until August 22.

Stimpel’s lawyer, Brett Abraham of Webber Wentzel, has until noon today to file his replying affidavit.

In terms of the agreement between the parties, which was approved by the court, SAA will defer any action on three of the four charges it has brought against Stimpel.

However, the airline was allowed to press the insolence charge and the matter will be heard tomorrow.

SAA admitted that it cut corners in its procurement procedures, but said it did so because it sought to raise an amount equal to its entire outstanding debt in two months.

SAA said it was forced to forgo the regular market in April because a deal arranged with the Free State Development Corporation for the full debt of R15 billion collapsed at the last minute.

About R7.3 billion in loans maturing at the end of June also forced its hand, the airline argued.

“There was not enough time to follow the standard procurement process to find an agent to source that amount of funding,” BM Kolisi, the state-owned carrier’s lawyers, said in the affidavit.

“What the respondent [SAA] planned was not simply to fund maturing loans in June 2016. It planned to consolidate its short-term and long-term debt, and to have an overall plan to restructure its total debt in a cost-effective and integrated way,” the lawyers said.

They revealed that the airline, which has made losses for years, was trying to reduce a R1.2 billion-a-year interest bill.

The debt has built up over years because of aircraft purchases and leases, poorly designed fuel hedges and the airline’s reliance on short-term debt to fund operating costs.

SAA has failed to release its 2015 financial results for nearly a year as it seeks a R5 billion state guarantee to show that it is technically solvent.

Finance Minister Pravin Gordhan, who oversees SAA, has asked Parliament to postpone the tabling of the results to September 15, the fourth such request.

State guarantees stand at R14.5 billion after the R6.5 billion extended in February 2015.

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