Civil rights body Outa presented proof on Friday that a contractor to South African Airways (SAA), had its Financial Services Board licence revoked.
BnP Capital, which is allegedly not trading from its registered address, was suspended for “serious transgressions”, said Outa director of legal affairs Advocate Ivan Herselman.
“We have learnt that the FSB licence of BnP Capital has been suspended,” Herselman stated.
He was speaking at Outa’s press conference in Johannesburg, a day after Outa said it planned to interdict the contract between SAA and BnP Capital, and will take further litigation procedures against SAA board members.
The civil rights body said that South African Airways had flouted proper tender processes when it hired little-known BnP Capital.
The boutique financier was to get R256-million for their work.
Outa said it has learnt that the deal has not yet been signed and is now threatening legal action against SAA, it said the deal is unlawful and must be stopped.
When BnP was contracted, the embattled airline insisted it had followed the correct protocol.
Outa wants SAA and BnP Capital to walk away from the deal.
“Our understanding is that even though a letter has been given to BnP Capital, the agreement has not been signed,” said Herselman.
“As according to the critical criteria, they no longer comply,” he said. “We only learnt of the (FSB) suspension late last night.”
Outa called for the SAA board to step down.
“They are using SAA (and) positioning people that are favourable to them,” he said. “They are removing all the financial controls.”
Wayne Duvenage, chairperson of the Organisation Undoing Tax Abuse (Outa), said that the organisation will be looking to stop the conclusion of the agreement, which could see BnP Capital shareholders earning R256m.
According to a statement by Outa, SAA could have sourced these services for one fifth of the cost, for anything between R42m and R85m.
Duvenage said at the briefing on Friday Outa has sent SAA a letter of demand, asking not to undertake the transaction.
In an emailed response to questions about the procurement procedure, SAA spokesperson Tlali Tlali, confirmed to Fin24 on Thursday that BnP Capital was appointed by SAA to act as Transactional Advisor and “that appointment conformed to prescribed procurement processes”.
“SAA is satisfied that it applied its mind and took into account all relevant and/or material factors before making its decision. We are confident that the process followed was compliant with governance framework.”
Outa also called for the SAA board to step down.
“They are using SAA, positioning people that are favourable to them. They are removing all the financial controls,” said Herselman.
“The medium to long-term plan is to carry out litigation against various members of the SAA board,” said Duvenage. This will cover gross violations such as the Airbus deal which came to light last year and most importantly the loss of critical leadership.
“Directors are not acting in the best interests of SAA,” he said. Referring to dismissals and suspensions of individuals in the past, he said: “These people are suspended simply because they question behaviour of the board.”
On Friday, Duvenage said the situation “cannot continue like this”.
“The airline is in bad shape,” he added. “You see at SAA, talented people… other people who are asking serious questions become sidelined and suspended. This organisation is 82 years old (and) it is a well-known brand around the world.
“This airline shouldn’t be running at a loss,” he said. “There is no reason for SAA to lose its talent.”
Outa, which has a secure whistle-blowing platform, is focusing its attention on allegations of tax abuse with regards to Sanral’s e-tolls, SAA and Eskom.
“We need to applaud the whistle-blowers,” he said. “We need to applaud whistle-blowing and make it more affordable.”
Herselman said Outa will complain about the matter to the Public Protector, but haven’t done so yet. “The Public Protector is inundated with work,” he said. “We will provide our work to the public protector.”
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