South African Airways (SAA) airbus A340. Picture: iStock
Governance at SAA is once again under scrutiny. This, following a local law enforcement inquiry and a damning criminal conviction in the United States.
Concerns are further heightened by ongoing investigations into allegations of compromised medical certificates for pilots and cabin crew issued by a suspended staffer.
The Directorate for Priority Crime Investigation (Hawks) confirmed that a criminal complaint against several senior SAA staffers is under investigation. The case is with its Serious Commercial Crime division.
In August, The Citizen reported that SAA head of marketing and sales Carla Da Silva along with two other employees are the subjects of a criminal complaint. It was laid by her former employer, Airlink, for the alleged theft of incorporeal property.
Simply put, it’s industrial espionage. Da Silva purportedly stole sensitive commercial data from Airlink on her departure from its employ. She then allegedly distributed it for use at SAA. Airlink chief executive Rodger Foster said that the company reported the matter to law enforcement for possible prosecution. Two weeks later Airlink reported a second sensitive data breach, allegedly also attributable to Da Silva.
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While the Hawks did not want to specifically name the persons under investigation, the case number that related to Airlink’s criminal complaint was the same case number that the Hawks confirmed was under investigation.
Chief medical officer at the airline, Dr Nhlanhla Sishaba, was suspended in September for allegedly issuing fraudulent medical fitness certificates to pilots and cabin crew.
On Wednesday, the United States Department of Justice sealed the conviction of a US citizen accused of bribing SAA procurement staff. Julian Aires, the president of JM Aviation pled guilty to charges under the Foreign Corrupt Practices Act for paying out millions in bribes, disguised as “consulting fees,” to key players at SAA and South African Airways Technical (SAAT) between 2016 and 2020.
The gratuities were paid in order to secure a $125 million contract for JM Aviation South Africa, which was a joint venture between Aires’ JM Aviation and aircraft parts business AAR, to provide components and repair services to SAAT. Reports indicated that bribes totalling $5.3 million were paid over the four year period.
SAAT chair and SAA board member Yakhe Kwinana was implicated in the matter, along with former SAA chair Dudu Myeni, and blamed for sustained damage to SAA by the Zondo Commission. In 2023, Kwinana was fined R 6.1 million following a disciplinary hearing and barred from practicing as a chartered accountant by the South African Institute of Chartered Accountants (SAICA).
Aires was also purportedly involved in a separate scheme to fleece SAA. He allegedly paid $2.7 million in bribes for a ground-handling contract between SAA and Swissport.
Organisation Undoing Tax Abuse (Outa) chief executive Wayne Duvenage wants to see malfeasance at SAA brought to book. He welcomed the US conviction as a good beginning. “What we want to see are those within the country who operated with nefarious intentions within SAA, to be held accountable,” he said. “The fact the Hawks are investigating criminal conduct by people within SAA is encouraging.”
Duvenage also wants to see action taken against Kwinana and her associates.
Chad Thomas, an organised crime investigator from IRS Forensic Investigations, said there seems to be an overall lack of ethical leadership and a disdain for corporate governance at SAA. He has been investigating the alleged industrial espionage that took place involving Airlink and Da Silva.
Thomas said that that it appeared that the carrier’s actions did not equate to a single lapse of judgement when allegedly unlawfully acquiring their competitors’ confidential information. “But instead displayed a complete disregard for the Companies Act, ethics and good corporate governance.” It’s not the first time, either.
Duvenage said the matter is of grave concern. “Troubling is that other senior management at SAA must have known of the company’s use of the alleged stolen data from Airlink. This begs the question, why did they allow this to happen or look away at the time? The known distribution of illegally obtained data implicates them and, once again, highlights the lack of governance, for which the chief executive should also possibly be held to account,” he said.
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Thomas explained that while the targets of the case are individuals who allegedly benefited from the theft and unlawful sharing of their former employer’s proprietary information, their current employer could also face criminal charges as a juristic entity under section 332 of the Criminal Procedure Act.
The Act deals with corporate liability and the criminal responsibility of entities like companies, associations, or organisations. The Act also outlines how these entities can be held criminally liable for offences committed by their directors, managers, or employees while acting within the scope of their employment or authority.
Thomas questioned why Dr Sishaba was immediately suspended while the subjects of the Hawks investigation remained employed, and Kwinana avoided being held accountable for her actions. This despite the conviction in America.
He added that actions by an implicated company such as, purportedly, SAA could also constitute a reckless act. This, in terms of section 22 of the Companies Act which could then lead to the company principals being ultimately charged for this alleged criminal misconduct.
SAA chair Derek Hanekom previously said that the SAA Board had not yet contemplated the matter. SAA this week said that it would not respond to questions regarding Da Silva because the case was subject to legal proceedings.
NOW READ: Legal action is a big deal, SAA board
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