Minister consulted on broad outline of SAA CEO's settlement

Wednesday, March 25, 2009

Pretoria - Cabinet says Public Enterprises Minister Brigitte Mabandla had entered into a "level of consultation" with the South African Airways Board on the broad outline of the settlement reached between the board and the national carrier's former CEO Khaya Ngqula.

However, when cabinet met last week, the minister did not have the full report as well as the finer details of the package, including the amount of the settlement.

A full report including a legal opinion on the settlement between the SAA Board and the former CEO was presented to the economic sector sub-committee meeting this morning.

Speaking after the meeting, Government Spokesperson Themba Maseko said there had been "some level of consultation" between the minister and the board.

"She had articulated a level of consultation with the board at this morning's meeting. But at that time she did not have all the information with her," he said, referring to Cabinets meeting last week.

"Cabinet had required the exact details of the package. Although the broad outline was consulted on, the finer details were not given to her - that is the Rands and cents of the settlement."

Cabinet issued a statement last week saying it would seek legal advice on the processes that were followed by the board in reaching a settlement with the CEO without the approval of the state as shareholder.

"Cabinet acknowledges its approach would have been different if all the reasons given were given last week," Mr Maseko said today.

"At that meeting, it had not become clear that she had consulted and had approved the broader outline of the settlement."

Mr Maseko said that at the meeting today, the minister had expressed regret over the misunderstanding that had occurred.

Meanwhile, he added that legal opinion was clear that it was not incorrect for the Board to enter into a settlement before an investigation was completed.

He said legal opinion also showed that with the agreement reached with the CEO, tight conditions were set down which would make it possible to take steps against him should an investigation find there was wrong doing on his part.

Mr Maseko said this matter also indicated that it was important that the roles of the Board, the shareholder minister and the Cabinet be clarified.

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