Zondo report on SAA, SAAT and SA Express

The report of the Judicial Commission of Inquiry into the capture of the state will consist of three parts. The first part was published by the Presidency after 19:00 on January 4 and has 874 pages.

Includes summary and analysis of evidence and recommendations regarding:

  • South African Airways (SAA), South African Airways Technical (SAAT) and SA Express.
  • The relationship of state entities and Gupta, New Age and Breakfast Shows.
  • South African Tax Service (SARS) and Public Procurement.

This article will cover only the findings and recommendations given on SAA, SAAT and SA Express. An article covering the rest of Part 1 will follow shortly.

The Commission found that:

  • The SAA under former chairman Dudu Myeni has refused “into an entity shaken by corruption and fraud”.
  • Former President Jacob Zuma “ran away from the commission” because he knew he would not be able to answer questions put to him, such as his insistence that Myeni stay in the SAA.
  • Those responsible for governance at SAA, SAAT, and SA Express have disregarded accountability standards.
  • The criminal charges against Myena for revealing the identity of a protected witness during her testimony must “lead to the finality of the law enforcement agency and the State Prosecutor’s Office”.
  • Myeni and individuals involved in securing millions for personal gain and the Jacob Zuma Foundation must be further investigated for “possible allegations of corruption.”
  • Myeni provided misinformation that led to financial losses for the SAA, and the National Attorney’s Office (NPA) must investigate whether it “should be prosecuted for fraud.”
  • Daluxolo Peter, Vuyisile Ndzeku, Lester Peter and Nontsasa Memela received a “return” totaling R28.5 million in connection with the finalization of Swissport’s groundhandling agreement with the SAA.
  • The award of a five-year tender for the joint venture components of AAR and JM Aviation was “illegal, irregular and unfair” and recommended that the NPA consider prosecuting JM Aviation directors, SAAT board members at the time, including Yakhe Kwinan and Nontsas Memela, for corruption or related crimes.
  • Ndzeku, Memela and Kwinana’s lawyer Lindelwa Mbanjwa hid the “true nature of the payments made by JM Aviation” Memeli through Mbanjwe, and that Ndzeku and Kwinana “tried to hide the payments” to Kwinana’s company. The Commission recommended that the Legal Practice Council consider whether Mbanjwa and Memela should be removed from the register of lawyers and the directory of lawyers, respectively.

The Commission recommended that:

  • Sars should determine whether JM Aviation paid VAT on 28.5 million RUN.
  • The 24-month deadline for declaring a director a delinquent should be extended.
  • Parliament should take steps to ensure that the State Security Agency can never again be used in the interests of certain individuals.
  • South Africa Airlines (ACSA) needs to take steps to recover the amounts paid to Regiments Capital under interest rate swap agreements, including additional losses suffered by ACSA on those contracts from Regiments Capital, Phetolo Ramosebudi, Eric Wood and Niven Pillay. If they fail, from Nedbank and Standard Bank. The NPA should consider prosecuting these individuals. The Confiscation Unit should recover the amounts paid to Ramosebudia, including the amounts paid by Nedbank and Standard Bank to Regiments Capital.
  • Law enforcement agencies should investigate the role of Moss Brickman, Maria Visnence and Nedbank in relation to these prosecution contracts.
  • In connection with the award of RFP 085/13, which McKinsey has already paid off in full, law enforcement agencies should investigate and consider prosecuting Ramosebudy, Wood, Regiments Capital, Indheran Pillay and Tewedros Gebreselasie.
  • The foreclosure unit should recover the amount of RUS 375,606 paid to Riskmaths Solutions from Ramosebudy, as well as the amount of RUR 6,241,500 paid by McKinsey to Regiments Capital in connection with the SAA Working Capital agreement.
  • Law enforcement agencies should investigate whether the failure of Phumeze Nhantsi, SAA CFO, to report the BNP transaction and her suspicions about the real motives of Myeni and Masotsha Mngadi is a crime.
  • The Office of the Auditor General needs to be further trained to be able to audit all public entities.
  • The South African Institute of Chartered Accountants (SAICA) should investigate whether Kwinana has the “necessary knowledge and respect for her duties” to perform the duties of a chartered accountant.
  • Government officials, civil servants and private individuals involved in the “robbery scheme” in connection with SA Express’s dealings with the Northwest Ministry of Transport “should be brought to justice”.
  • The NPA should consider Vivien Natasen’s money laundering indictment.
  • The Reserve Bank should also investigate whether Calandre Villoen’s Financial Services Operation (AMFS) was “a cash transit business that is simply not in line with its FICA”, or was operating illegally as an unlicensed bank. Or did AMFS provide money laundering services?

All the commission can do is recommend. Law enforcement agencies have the task of acting on recommendations, conducting investigations and prosecuting perpetrators in a timely and appropriate manner. Justice must win.

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