Black Management Forum takes Mango CEO challenge to court

The Black Management Forum (BMF) has filed papers in the Johannesburg High Court challenging the appointment of Nico Bezuidenhout as the chief executive of Mango Airlines.

In the application, BMF President Andile Nomlala asks the court to set aside Bezuidenhout’s appointment and calls into question the lawfulness of the process that was followed to appoint him.

The court challenge is not the first attempt by the BMF to get Bezuidenhout’s appointment reviewed. It previously sent a letter of concern to the Public Enterprises Committee in Parliament and also raised the issue with Mango’s board. The forum says it has received no official response from either party.

Was the process unfair?

In the papers, which Moneyweb has seen, Nomlala states that it is not Bezuidenhout’s capability to do the job that is being questioned, but rather the process that was followed to appoint him.

In the BMF’s assessment, Public Enterprises Minister Pravin Gordhan and the board of Mango, who are listed as respondents, “completely flouted the constitutional principle of equality and fairness and unduly favoured [Bezuidenhout] for the position”.

The low-cost airline is a (profitable) wholly-owned subsidiary of South African Airways (SAA), which is also listed as a respondent.

The organisation makes this assertion based on the fact that when Mango initially put out the post calling for applications for a CEO, around August 2018, the minimum requirements specified included that candidates should have a tertiary qualification such as a Bachelor of Administration degree. The advertisement further specified that persons with an MBA (Master of Business Administration) would have an “added advantage”.

Bezuidenhout only has a matric qualification, and while he was enrolled for a Bachelor of Commerce (BCom) and an MBA, he never completed the degrees. Despite this he has extensive experience in the aviation sector.

He was appointed as Mango’s founding CEO in 2006, serving in that capacity for ten years, and has been acting head of SAA on two occasions (in 2013 and 2015). He has been CEO of UK-based company Fastjet for the past few years, returning to Mango as CEO on October 1 this year.

When the initial recruitment process was finalised Bezuidenhout was not shortlisted, as he did not meet the minimum requirements, the BMF says in its papers.

Instead, following the conclusion of the recruitment and selection process, the board of SAA referred joint Comair CEO Glenn Orsmond to Gordhan as its preferred candidate.

‘Undue influence’

In its letter to the minister, former SAA board chair Bhekumuzi Magwaza states that Orsmond’s appointment was approved following a “rigorous recruitment process”. Orsmond, unlike Bezuidenhout, has a BCom degree.

However, Orsmond’s recommendation was subsequently withdrawn and a new process was initiated. Mango readvertised the position and this time around the qualification criteria had been expanded to include persons with matric and more than ten years’ experience as an airline CEO.

Bezuidenhout was ultimately appointed.

According to the BMF, he was only hired because of “undue pressure and an unlawful instruction” from Gordhan.

To prove this point, a letter dated May 13, 2019 from Magwaza to Gordhan is annexed to the court papers. In it are references to why Orsmond’s selection was withdrawn.

In this letter, Magwaza also corrects a statement made in a previous letter dated May 3, 2019, where he said that after the board of Mango and SAA had identified Orsmond as a suitable candidate, Gordhan referred the submission back to the SAA board for “reconsideration”.

This prompted the airline to restart the recruitment process, which resulted in Bezuidenhout’s appointment.

Magwaza said the correct statement was in fact that the process was restarted to ensure that a more “effective and transparent” process was followed.

The BMF describes this reason as “flimsy and contrived” as the letter does not explain why the initial process was not effective and why the board had made the decision to appoint Orsmond on the basis of a flawed process.

“If the recruitment process was restarted for the reasons now stated on the letter one wonders why then it was necessary to change the advertisement as [it] had nothing to do with the efficiency of the process,” the organisation adds.

The BMF concludes that the only compelling reason for withdrawing Orsmond’s recommendation is either that the board was “bowing to pressure” from Gordhan or there was an “unlawful reason”.

Efficient and transparent

In response to questions sent by Moneyweb, the Department of Public Enterprises (DPE) said that after Orsmond was recommended to Gordhan for approval, the minister found that “representatives from the SAA board and the CEO had not been involved in the selection process to ensure alignment between SAA and Mango”.

After receiving a legal opinion, which found that the SAA board could lead the selection process, followed by “extensive discussions and deliberations, the board took a decision to restart the process,” said DPE Spokesperson Sam Mkokeli.

“This approach was informed by the need to ensure greater alignment [between the two airlines], transparency and accountability.

“The department understands that this decision was informed by the legal opinion that had been obtained as well as a desire to attract a wider pool of candidates, among other factors,” he added.

Legal advice

While the BMF was not able to annex the legal opinion to its court papers, it mentions that the board received legal advice from law firm ENSafrica in October 2018 on whether it could appoint Bezuidenhout.

The BMF says ENSafrica noted that the board could not appoint someone who did not meet the “essential” requirements of having tertiary qualifications as outlined in the Mango “competency profile” that specifies which competencies individuals should have for certain positions.

However, the document reads that the board could do this if it withdrew the initial job advertisement and issued a new one where a tertiary qualification is not a requirement.

The BMF said as the board had found a “suitable candidate” it is unclear why it would amend the selection criteria and, further, that it was “irrational” to remove the “essential” requirement if the intention was to undergo a “more efficient and transparent” process.

“The conclusion, especially when one considers the ENSafrica opinion, is inescapable: that the second advert was issued and tailored to fit [Bezuidenhout’s] lack of a bachelor’s degree,” the BMF argues.

SAA Spokesperson Tlali Tlali said the position was advertised twice to ensure that both qualifications and industry experience were considered before a final recommendation was made.

“As a representative of the shareholder (government), the minister advised the board to follow a transparent and inclusive process. The minister neither prescribed nor influenced the appointment of the CEO of Mango,” said Tlali.

“The process to appoint the CEO of Mango falls within the powers of the board of directors, who are required in law to discharge their duties independently and not abdicate their powers or responsibilities”.

Mkokeli said Gordhan will defend the decision to appoint Bezuidenhout in court when the need arises.

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