'It was shocking where SAA ended up under Gigaba' - Cheryl Carolus

Former chairperson says minister was determined to destroy the board's reputation

Gigaba's push for Jet Airways and SAA to collaborate was 'peculiar' – Carolus

Former SAA chairperson Cheryl Carolus has described how the relationship between then minister of public enterprises Malusi Gigaba and the SAA board had deteriorated, adding that Gigaba was quite persistent to assist Jet Airways and SAA "find one another".

Carolus was testifying at the judicial commission of inquiry into state capture on Thursday.

During her testimony, Carolus said former minister Gigaba would in various public forums make utterances which were quite "lethal and unfair" and he would also question the board's competence.

"We felt quite aggrieved and he was starting to question the integrity of the group (SAA board)," she said.

Carolus also told inquiry chair Justice Raymond Zondo about her arrival at SAA, saying there were governance failures and violations of the Public Finance Management Act as well as procurement and tender processes.

"[There was] very poor staff morale...bad tone set by management [and] no team spirit," she said.

Mumbai route was 'critical'

Carolus also touched on the South Africa to Mumbai route matter mentioned during Barbara Hogan's submission.

Hogan, who was public enterprises minister at the time, previously testified before the Zondo commission that she accompanied then president Jacob Zuma on a state visit to India in June 2010 where she received information that SAA would be terminating its Johannesburg to Mumbai route.

Hogan contacted Carolus, who was SAA chairperson at the time, via text to seek confirmation.

Carolus in response told Hogan that SAA would not be terminating that route. Hogan further stated that Carolus confirmed to her that Jet Airways had been lobbying SAA unsuccessfully to let go of the profitable Mumbai route.

Carolus told the Zondo commission: "The Mumbai route was quite critical, and it is true we were making losses...from Mumbai to Johannesburg," she said.

She said weeks after Gigaba's appointment he requested a meeting to discuss the Mumbai route. Carolus testified that Gigaba met with the board although she was not part of the meeting.

'Peculiar' three-hour wait

She said the former minister said he was waiting for more people to join the meeting, however, they waited for the officials for three hours.

"Do you know why the two gentlemen kept everybody waiting for three hours? What was so special about these people?" Zondo asked Carolus.

"I do not know chairperson, it was just so peculiar that a whole minister...[would] sit there for three hours," Carolus said in response.

Zondo says he finds it strange that Jet Aiways team arrived late at the first meeting and led the discussion and says in the second meeting SAA is not told that Jet Airways will be part of the meeting. #StateCaptureInquiry @TeamNews24— Jeanette Chabalala (@J_chabalala) November 29, 2018

She said the chairperson of Jet Airways was present at the meeting and led the discussions while Gigaba said nothing.

She said Jet Airways proposed that the Mumbai route should be dropped, but the board said it was happy to discuss "collaborating" and not "colluding".

She said the board made it clear that it was not willing to give up the route.

Board's refusal 'a waste of money'

She also told Zondo about another meeting Gigaba requested with the board. Carolus said she was not part of the second meeting, however, Jet Airways was again represented.

During the meeting, Gigaba's legal adviser Siyabonga Mahlangu told then CEO Siza Mzimela that board's refusal to close the Mumbai route was wasting money that could be used to "build RDP houses".

She said Gigaba invited officials to the meeting and the Jet Airways chairperson was one of them.

"We found it quite peculiar at the time. The minister is our shareholder, and he seemed to be quite persistent to assist Jet Airways and SAA to find one another," she said.  "As a shareholder (minister) you not about [helping] the other side," she said.

She said it was clear Gigaba was in discussion with Jet Airways in a way that he wasn't with the SAA board.



'It was shocking where SAA ended up under Gigaba'

Cheryl Carolus also told the commission that it was "shocking" where SAA ended up under Malusi Gigaba as public enterprises minister.

Carolus told inquiry chairperson Deputy Chief Justice Raymond Zondo on Thursday that Gigaba was "hostile" towards the board and was "determined to ruin our reputations".

She said in 2012 when SAA had received a clean audit and submitted its financials on time, Gigaba wrote to Parliament that the state-owned airline's financials had not been finalised.

She explained to Zondo that when the board was nearing the end of its term its members were becoming concerned about some of Gigaba's public utterances about them.

"The minister spoke at the Cape Town Press Club and he made quite sweeping statements about the fact that SAA, the board, had no strategy and it had no vision and, basically, they were unpatriotic," she told the commission.

She said Gigaba's utterances could not have been correct because each year, the board submitted its business plan, strategy and corporate plan which were evaluated on a quarterly basis.

Gigaba 'just a politician'

"So, we did think it was inappropriate and quite nasty for the minister to be going around [saying these things] but he knew it wasn't true.

"I rolled my eyes, some of the other board members felt much more angry about it. People felt that the minister was just being malicious, and I just said to them that the minister was just a politician," she said.

She said when he was confronted about his public utterances, Gigaba claimed he was quoted out of context.

She also told the commission that it worried the board that the former minister said it did not have a strategy and was not competent.

"At this stage we got a bit concerned. Six months after conclusion of our financial year the minister had not disclosed our financial state – we met the PFMA (Public Finance Management Act) requirements by submitting our financials to our accounting authority."

She said Gigaba had postponed an annual general meeting in order to secure a guarantee letter for SAA from Treasury.


Carolus told the inquiry that following this, members of the board wanted to resign, with one handing in her a letter of resignation.

She said at the time, the company was in good health, and added that she pleaded with members of the board not to resign.

"I said to them 'look it is a matter of days until our term comes to an end, please let us not harm the airline'."

"I had three sets of conversations with directors who all wanted to resign," Carolus said.

She said when one member of the board handed her a letter of resignation she communicated with Gigaba that people were concerned and "quite agitated" and requested the guarantee letter.

However, two days after she met with Gigaba, there was an article in the Business Day which stated that the former minister wrote to Speaker of Parliament indicating that the annual general meeting of SAA had been postponed because its financial statements were not in order.

"Which was completely untrue and also lawfully quite irresponsible," Carolus said.


She said Gigaba had the financials for over a month and by then the board of directors were "hopping mad".

"I felt that the minister had checkmated me [for him] to be writing to Parliament," she said.

She said following this she told the board that she was resigning and that she could not trust Gigaba.

Carolus also described the difference in approach between former minister Barbara Hogan and Gigaba.

"It was chalk and cheese," she said.

"The centrality of it all is about the fact that, here were two ministers, one of whom understood, in very simple terms, the difference in the roles between shareholder, board and management. Minister Hogan would never ask the board to do something that's a management matter.

"Minister Hogan was absolutely scrupulous, and quite simple. When you dealt with her, she raised her displeasure, and she did on occasion.

"So, from a governance point of view, a huge difference. It was shocking where SAA ended up under (former) minister Gigaba," she added.