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Myeni Loses Bid To Remove Outa From Case

Former South African Airways board chair Dudu Myeni has lost her bid to remove the Organisation Undoing Tax Abuse (Outa) from her delinquency case. 

The application by Myeni was dismissed yesterday. She had argued that Outa had no lawful jurisdiction to apply for her to be declared a delinquent director. 

Outa brought the delinquency case against Myeni and argued that the damage she caused while she chaired the SAA board should warrant her being declared a delinquent director. 

Myeni is accused of ramming through BNP Capital to raise capital which resulted in SAA losing R49.9 million which was paid as a cancellation fee when the deal was later canned.  

The case will resume in January.

The matter has not proceeded without drama. Myeni had first failed to appear in court for the matter and was chastised by Judge in the matter. She later blamed her legal representatives.

Myeni had also lost an application to have other SAA former board members added to the case. 

In court papers, the Outa and SAAPA argue that the SAA board’s appointment of BnPCapital in April 2016 as a transaction advisor to SAA was unlawful.

•    They further argue that the board’s extension in May 2016 of the BnPCapital contract to include sourcing funding of R15 billion for SAA was unlawful and that BnP had by then lost its financial services provider licence.

•    They also argue that the board’s decision in July 2016 to create and pay to BnP a cancellation fee of R49.9m for the failed contract was irregular and unlawful.

•    That in June 2015, Myeni unlawfully intervened in a board-approved deal between SAA and Emirates airline to block it, claiming that then-President Jacob Zuma had reservations about the deal and resulting in significant financial losses and reputational harm for SAA.

•    That in 2013, Myeni unlawfully interfered in the financing for SAA’s contract to buy 20 new Airbus A320-200 aircraft for SAA, apparently to gain a financial advantage for another party. Then in September 2015, Myeni unlawfully intervened to block an SAA agreement with Airbus to cancel the purchase of the remaining 10 aircraft in favour of leasing five aircraft.

•    They argue that Myeni’s action was intended to improperly involve and benefit a new aircraft leasing company and would cause unnecessary costs to SAA.

•    That when Ernst & Young reported to the board in December 2015 on significant problems with SAA procurement and contract management, Myeni and the board ignored the report and took no action to safeguard SAA’s interests and assets. -IOL