South African Airways Suspends CFO, ex-CEO on Probe Allegations

JOHANNESBURG (Capital Markets in Africa) – South African Airways suspended two executives including Chief Financial Officer Phumeza Nhantsi following unspecified allegations made against them in a forensic probe of the state-owned airline.

Musa Zwane, who was acting chief executive officer for two years until November, has also been placed on leave pending a disciplinary hearing, SAA spokesman Tlali Tlali said Tuesday. The airline won’t comment further while the probe is ongoing and both executives are presumed innocent, he said.

The suspension of SAA’s top two executives under former Chairman Dudu Myenicomes after new President Cyril Ramaphosa pledged to clean up state-owned entities that have been embroiled in allegations of mismanagement and corruption. Myeni, who also chaired former President Jacob Zuma’s charitable foundation, was summoned to give evidence to a parliament inquiry into the misuse of state funds Tuesday, though she didn’t attend.

The government overhauled the board of state utility Eskom Holdings SOC Ltd. in January, after Ramaphosa was elected leader of South Africa’s ruling African National Congress but before he became president. Jabu Mabuza was appointed chairman and the company is seeking a permanent CEO. Former acting head Matshela Koko, who was suspended, resigned Feb. 16.

South African Airways appointed Vuyani Jarana as CEO in November to turn around the struggling airline, which hasn’t made a profit since 2011 and needed a government bailout last year. He’s set in place a three-year plan, which includes scaling back the carrier by cutting routes, flights and planes.

In a report released last week, Auditor General Kimi Makwetu said SAA failed to properly value assets or correctly record irregular or wasteful expenditure.

SAA appointed Nona Sonjani as acting CFO and Wellington Nyuswa as acting chief technical officer, the position held by Zwane since Jarana joined from Vodacom Group Ltd.

Source: Bloomberg Business News