Ngqula faces new claims for SAA sponsorship deals

Former South African Airways (SAA) CEO Khaya Ngqula is to be served with new summonses to repay the airline millions of rand spent without authorisation on sports sponsorships.

This will be in addition to the summons already issued for the recovery of about R31 million he allegedly spent irregularly on staff retention bonuses beyond his delegated authority, hospitality suites and junkets abroad for friends.

SAA chairwoman Cheryl Carolus told Parliament's standing committee on public accounts (Scopa) she was convinced that significant amounts of money misspent by Ngqula, who had consistently refused to respond to requests for information since September last year, had yet to be uncovered. Court actions would be instituted as new evidence emerged.

More SAA employees involved in flouting policies and laws were facing disciplinary proceedings as the SAA board acted on the findings of the forensic investigation conducted by KPMG.

Suspended

The head of procurement had been suspended and a lot more names of those involved in improper behaviour were expected to come to light during the court proceedings against Ngqula, SAA board member Margie Whitehouse said.

She said a summons for the repayment of the R21 million three-year sponsorship for Argentinian professional golfer Angel Cabrera would be served shortly. Ngqula's sponsorship limit was R1 million after November 2006 and R2 million afterwards.

Whitehouse said there was also a "high probability" a further claim related to the R120 million sponsorship of the Association of Tennis Professionals between 2006 and last year would be served by the end of the month, though she could not provide the exact amount involved as part of the claim had prescribed.

Also of concern to Scopa was the R68 million paid by SAA over four years to auditing firm Ernst & Young to perform internal audit work, as well as the lack of oversight of Ngqula's activities by both the firm and the former board of directors.

Carolus said the auditors' mandate was changed as it had been doing a lot of the staff's work. The contract had one year left to run and in the meantime SAA would build its own internal audit capacity.

Scopa members questioned whether the former SAA board had fulfilled its fiduciary duties as Ngqula's flouting of corporate governance rules and of his spending limits took place under its watch.

Warning lights had flashed for several years but these were ignored by the board, which Scopa believed should be held accountable for their "gross negligence".

Source: Business Day