SAA CEO may not have signed contract yet

Finance Minister, Malusi Gigaba, committed in his 14 point plan to appoint the SAA CEO by 31 July 2017. This was a key ‘action item’ in the plan and a condition imposed by some of SAA’s lenders.
Gigaba assured the country on numerous occasions that Mr Vuyani Jarana had been appointed as the CEO:
• On 3 August 2017, he said that ‘Vuyani Jarana has been appointed South African Airways Chief Executive Officer. He will commence his duties after his current employer has officially released him;’
• The next day, he said that ‘I think it is appropriate to start with an announcement that I am sure you all have heard that we have appointed the CEO of SAA yesterday;’ and
• On 25 August 2017, he said that ‘The good thing is that there is a new CEO who has been appointed. We are paying close attention to strengthening the board of SAA and appointing the requisite skills on the board.’
These assurances seem to have been contradicted by SAA Board Chair, Dudu Myeni, on 23 August 2017 when she informed Parliament’s Standing Committee on Public Accounts (SCOPA) that she did not have a date for when Jarana would take up the CEO position. Myeni told SCOPA that ‘He has accepted the offer’ and that ‘We are hoping that he will start on the first of September.’
It is quite astounding that the SAA Board Chair does not seem to have knowledge of any signed contract which leads us to believe that Mr Jarana may not have signed the contract yet.
The CEO’s appointment is important because if the CEO is not appointed, this could result in a default that would require all remaining R14.6 billion of bank loans to be repaid immediately.
SAA has not had a permanent CEO for more than two years and has run at massive losses amounting to R6.1 billion during that period. It is critical that a permanent CEO be put in place to take control and implement robust cost-cutting and revenue improvement measures.

Gigaba must stop passing the buck and sell SAA

Note to editors: Attached please find sound bites in English and isiZulu
Claims by Finance Minister, Malusi Gigaba, that the DA’s revelations that he has already signed a R10 billion bailout proposal for the drowning State airline, South African Airways (SAA), ‘has blown the negotiations’ is disingenuous at best and grossly misleading at worst.
SAA has been in trouble for over a decade and is now in very serious trouble due to the ANC government’s utter failure to turn it around.
Gigaba reportedly said that ‘the statement by Lees that a R10bn recapitalisation of SAA was on the cards… has blown the negotiations. SAA had lost its leverage.‘
He is horribly mistaken. The Standard Chartered Bank demanded payment from SAA in June this year and this no doubt caused other banks to demand payment.
If there were any leverage, it was blown when Standard and Chartered refused to roll over its R2.2 billion loan to SAA two months ago.
The bank’s lack of confidence in SAA and the South African government has nothing to do with the DA’s revelations in Parliament and everything to do with a complete lack of confidence, based on the very actions of the ANC government and their mismanagement of SAA’s finances.
The Minister of Finance would do well to face up to this fact and to finally do what is needed – put SAA into business rescue and to find private equity investors.

DA succeeds in getting Chairperson to call Gigaba to explain the Guptas’ citizenship

The DA welcomes today’s commitment by the Chairperson of the Home Affairs Portfolio Committee, Lemias Mashile, to call Finance Minister, Malusi Gigaba, to explain his involvement in and reasons for granting citizenship to the Guptas when he was the Home Affairs Minister.
The DA are of the belief that Gigaba breached the Citizenship Act by not declaring the naturalisation of Gupta family members to Parliament, as is required by law.
At a previous meeting on the 20th June, the Committee members unanimously agreed to summon Gigaba to testify under oath on the record of decision for granting the Guptas’ citizenship and to explain in detail his relationship with them.
The DA, therefore, urges Chairperson Mashile to urgently confirm a date so that this long standing issue can be resolved.
Parliament must exercise its powers to call any person before it for a full and proper briefing. Should Minister Gigaba refuse, he must then be summoned to account as originally agreed to.

Myeni’s lies the last straw

Today’s reports that SAA Board Chair Dudu Myeni lied in an attempt to sabotage the appointment of a desperately needed CEO for SAA is the last straw.
When SAA appear before the Finance Committee in Parliament on Tuesday, the DA will press for corporate warlord Myeni to be fired as the SAA Board Chair.
SAA has been without a CEO for more than two years and during this time SAA has lost R6.3 billion through bad management, particularly by the Board of Directors and its Chair, Myeni.
Myeni’s apparent attempt to manipulate Finance Minister, Malusi Gigaba, to get the Board meeting that sat to consider the appointment of a CEO stopped, simply reinforces the delinquent director ruling against Myeni by the Companies and Intellectual Properties Commission (CIPC). Her attempt to have the Companies Tribunal to overturn this CIPC ruling must surely fail and Myeni must be barred from acting as a Director on the Board of any company.
SAA is on the brink of bankruptcy and yet Myeni has allegedly missed the last eight board meetings. SAA has already apparently defaulted on repayments of loans and is scrambling to find replacement funding for R9 billion of loans already overdue and becoming due for repayment in the current year.
In the face of bankruptcy, there are only two options that can be considered for SAA. The one will in all likelihood be yet another taxpayer bailout. However, the logical and sensible option would be to file for business rescue which would put SAA on the road towards recovery and privatisation.
Myeni’s blocking of the SAA CEO appointment shows that she is continuing to obstruct the recovery of SAA. The national carrier is already in a perilous state and she must be removed as Board Chair with immediate effect to stop her doing even more damage to SAA.

National Assembly speaker Baleka Mbete refuses “snap debate” on the economic crisis in SA

Note to Editors: Copies of the correspondence between David Maynier MP, DA Shadow Minister of Finance, and the Speaker of the National Assembly, Baleka Mbete, can be found [here].
We should be debating the fact that we are in deep economic trouble in South Africa.
However, the Speaker of the National Assembly, Baleka Mbete, has refused my request for a debate on an urgent matter of national public importance, in terms of National Assembly Rule 130, to debate measures to deal with the economic crisis in South Africa.
The reason my request for a “snap debate” on measures to deal with the economic crisis was refused is absurd. The Speaker of the National Assembly, Baleka Mbete, believes “the matter can be considered by some other means in the near future”. However, she must know:

  • the debate on the Appropriations Bill [B5-2017] was an opportunity to debate a R767 billion appropriation, to fund 40 national departments in 2017/18, and provided no opportunity to properly debate the economic crisis; and
  • the next opportunity for Members Statements is 22 August 2017; the next opportunity for oral questions is 23 August 2017; and if a written question was submitted today it would, at best, be replied to on 14 July 2017.

The Speaker of the National Assembly, Baleka Mbete, knows there is absolutely no prospect of this matter being dealt with by other means in the near future and is simply protecting President Jacob Zuma and Finance Minister, Malusi Gigaba, from a tough debate on measures to deal with the economic crisis in South Africa.
We are not going to take this lying down and will continue to fight to schedule a national debate on the economic crisis in South Africa.

DA requests Gigaba to begin investigating CPS R1 billion profit

The DA has written to Finance Minister, Malusi Gigaba, requesting that he commences an investigation within the office of the Chief Procurement Officer, into the unconscionable R1.1 billion profit that Cash Paymaster Solutions has made from the invalid social grants contract.
The DA believes that not only is such extraordinary profiteering from public money an insult to poor South Africans, it also may contradict the Constitutional Court order from 2014 which banned CPS from making any further profits from the invalid contract.
On Tuesday CPS filed a statement of profit with the Constitutional Court, wherein it discloses a pre-tax profit of R1.1 billion from the Social Grant Distribution part of its work, but fails to disclose the profit it has made from other incidental services it has provided, including life cover, funeral insurance and pre-paid services.
All in all CPS has been allowed to profit to the most extraordinary levels, directly from the safety net provided to the poorest and most vulnerable South Africans. It is a profit-driven company, but its contract was never valid and its work was only allowed to continue because of the sheer recklessness of Minister Bathabile Dlamini’s department and SASSA.
Whether CPS has violated the Constitutional Court’s 2014 order preventing it from profiting will be up to the Court to decide. But we believe that the Chief Procurement Officer must investigate the terms under which this contract was concluded that allowed for such obscene profits to be made.
Essentially, either CPS misled government at the time of contracting, or SASSA and the Department of Social Development agreed to this unacceptable profit margin.
We expect that the Chief Procurement Officer will unearth the truth. If CPS misled government, every cent it has milked from South Africa must be recovered. Alternatively, if the Social Development Department and SASSA allowed for this daylight-robbery, albeit under an invalid contract, Minister Dlamini will have a R1 billion question to account to Parliament for.

President Jacob Zuma is guilty of the pre-meditated murder of the economy in South Africa

Note to Editors: The following speech was delivered in Parliament today by DA Shadow Minister of Finance, David Maynier MP, during the Budget Vote on National Treasury.
Madam Speaker,
The Minister of Home Affairs, Malusi Gigaba, was at a fashion show, rubbing shoulders with the rich and famous, when the call came informing him that he had got the top job and would be the next Finance Minister.
It was not long before the new Minister and his sidekick, Mayihlome Tshwete, swooped down, rather like Batman and Robin, on National Treasury.
The Minister, to his credit, passed the first big test of any South African Finance Minister – he lasted the weekend.
This was the culmination of a shameful midnight Cabinet reshuffle. President Jacob Zuma had:

  • Recalled the former Minister of Finance, Pravin Gordhan, from an international investor roadshow on the basis of a bizarre “intelligence report” claiming he was part of a plot to mobilise people to overthrow the state; and
  • Then promptly fired him to, can you believe it, “improve efficiency and effectiveness”.

The truth is that, had the President been serious about improving efficiency and effectiveness, he would have fired Bathabile Dlamini and Faith Mthambi who, together, could barely run a bath.
The Deputy President, Cyril Ramaphosa, condemned the Cabinet reshuffle, saying it was “unacceptable”.
Even, ANC Secretary General, Gwede Mantashe, condemned the Cabinet reshuffle, saying he was “very uncomfortable”.
But, the Minister defended the Cabinet reshuffle by condemning those who had condemned the Cabinet reshuffle.
He dismissed them as “a mixed bag of so-called ANC stalwarts and disillusioned ex-ANC leaders who were ill-disciplined”.
The fact is President Jacob Zuma’s midnight Cabinet reshuffle had nothing to do with improving efficiency and effectiveness and everything to do with the capture of National Treasury for his most important clients, the Guptas.
And the President had the perfect man for the job in his new Finance Minister, Malusi Gigaba, because in his own words, “I don’t ask questions, I simply comply with instructions.”
Things have been in absolute shambles since the Minister took over, as he somersaulted between “radical economic transformation” and “inclusive economic growth”, and between attacking orthodox and right-wing economists at National Treasury and supporting the skilled and experienced team at National Treasury.
However, things went from bad to worse when the Minister appointed Professor Chris Malikane, who seems to have been trained at the “Hugo Chavez School of Economics”, and who has some mad ideas on the economy, including nationalising the banks, mines and insurance companies, as his economic advisor at National Treasury.
Of course, when you have a Minister, who in his own words simply complies with instructions, who advises him is an important issue.
Things began to spin out of control as the Minister told his economic advisor to “keep quiet”, but the economic advisor told the Minister he would not “shut up”.
The Minister was forced into damage control mode, sending his economic advisor to the equivalent of the “re-education camp” to be “rehabilitated”.
Now, I have said before that the Minister was “Des van Rooyen in a designer suit”.
But, I was wrong.
Because, at least Des van Rooyen has a Master’s degree in finance, even if half his assignments were done by the Parliamentary Budget Office.
Whatever the case, the Minister has lost control and the message is now one part Bloomberg, one part ANN7, and one part The Real Housewives of New York.
The National Treasury’s legislative mandate, and the R30.79 billion budget for the 2017/18 financial year, are directed at ensuring transparency, accountability and sound fiscal controls in the management of our public finances.
But the question is: how long can this last?
Because, like all politicians accumulating power, the Minister has concealed his real political agenda, which he revealed, in an unguarded moment, during his maiden press conference, and which included:

  • A strong commitment to implementing “radical economic transformation”; and
  • An attack on National Treasury, which he believes is dominated by big business, international investors and orthodox economists.

The fact is, and let us not be naïve about this, the Minister has been appointed to “defang” National Treasury.
And he will do it with charm and cunning, and he will do it patiently and slowly:

  • By exerting political control and reducing the institutional independence of National Treasury;
  • By diluting the legislative mandate to reduce the institutional strength of National Treasury;
  • By controlling the procurement process;
  • By controlling the Public Investment Corporation; and
  • Most importantly, by approving the nuclear build programme.

If you look carefully, the work is already underway “below the line” with

  • The Minister in the Presidency, Jeff Radebe, “power-grabbing” the budget prioritisation process from National Treasury; and
  • The Minister of Justice and Correctional Services, Michael Masuta, “power-grabbing” control of the Financial Intelligence Centre from National Treasury.

The truth is that National Treasury is in danger of being “defanged” and reduced to a bunch of bookkeepers under the new Minister and his boss, President Jacob Zuma.
We cannot afford to surrender to the mafia state and so we are going to have to fight to maintain the institutional independence and institutional strength of National Treasury.
What this means is that the Finance Committee is going to require a reset from legislative mode to oversight mode and carefully scrutinise procurement, public investments, contingent liabilities and fiscal risks, including most importantly the nuclear build programme.
The fact is that, in the end, President Jacob Zuma must have known that the midnight Cabinet reshuffle would push the economy off the cliff.
We are now in deep trouble with the midnight Cabinet reshuffle and radical economic transformation delivering:

  • stagnant economic growth;
  • declining per capita incomes;
  • a collapse in investment;
  • a spike in disinvestment;
  • massive unemployment;
  • staggering national debt;
  • “zombie” state-owned enterprises;
  • junk status; and
  • ultimately, a loss of hope for the millions of South Africans who do not have jobs, or who have given up looking for jobs, and who live without dignity, without independence, and without freedom, in South Africa.

That is why it is not an exaggeration to say that President Jacob Zuma’s midnight Cabinet reshuffle, and his policy of radical economic transformation, amounts to the pre-meditated murder of the economy in South Africa.
So, if you do not have a job, or you have given up looking for a job, you need to know this: You do not have a job because the ANC-government has systematically mismanaged the economy; and

  • You do not have a job because the ANC-government has systematically mismanaged the economy; and
  • You will never get a job as long as the ANC-government is in power in South Africa.

That is why you will have a choice, in the 2019 National Election, between a strong know-how economy, which creates jobs for all, led by the DA, or a weak know-who economy, which creates jobs for the few.
We say: bring it on.

DA welcomes Vally’s ruling on Rule 53

Judge Vally has today, in line with many other decisions of the Supreme Court of Appeal and other courts, interpreted Rule 53 of the Unified Rules of Court to include executive decisions specifically in this case to include constituting a cabinet.
It is a great day for the transparency of government.
The dropping of Finance Minister, Pravin Gordhan, and Deputy Finance Minister, Mcebisi Jonas had a cataclysmic effect on the economy, the country and indeed, on the 9 million unemployed South Africans.
On the face of it, President Zuma’s decision was patently irrational and unreasonable with predictable consequences, based on a similar decision he took in 2015 to axe then Finance Minister, Nhlanhla Nene.
Thanks to this ruling, the DA and the country will now be furnished with the reasons and record of decision which are due on Thursday, 11 May 2017, by the end of the day.
The DA will then make a decision whether to proceed with our substantive motion to review the rationality of the President’s midnight reshuffle.
This decision is certainly controversial and has provoked strong feelings including the response by Mr Mzwanele Jimmy Manyi to lay criminal charges for corruption against Judge Vally.
Mr Manyi has proved himself to be one of Jacob Zuma’s most avid defenders and cheerleaders, but his latest move is simply absurd.
The DA trusts that President Zuma is readying himself to fully comply with the order, as South Africans deserve the answers that the record of decision should contain.
President Zuma has spent much of his presidency dodging accountability and using every opportunity to keep himself from answering to a court of law for very serious charges.
The President cannot hide forever and the DA will ensure, through every avenue available, that he accounts for his actions. Like any citizen, Jacob Zuma is not above the law.

FSB to investigate possible “insider trading” linked to the firing of Pravin Gordhan

The Financial Services Board (FSB) has confirmed it will investigate possible “insider trading” linked to the firing of former Minister of Finance, Pravin Gordhan, following the cabinet reshuffle triggered by President Jacob Zuma.
There is widespread concern there may have been “insider trading”, and there is some circumstantial evidence to suggest there was “insider trading”, which may have materially benefiting someone with prior knowledge of the former finance minister’s firing.
I, therefore, wrote to the FSB on 31 March 2017 requesting an investigation into possible “insider trading” linked to the firing of the former finance minister.
On 03 April 2017 Advocate Dube Tshidi, the Chief Executive Officer of the FSB, replied that he had instructed Head of Enforcement, Mr. Gerhard van Deventer, “to look into the matter”.
The FSB’s enforcement division, which inter alia investigates alleged market abuse under the Financial Markets Act (No. 19 of 2012), will be responsible for the actual investigation, following a review of various trades being conducted by the Johannesburg Stock Exchange.
We do not have all the facts but we do know senior ANC alliance officials had prior knowledge of the former finance minister’s firing, immediately prior to the event.
Whatever the case we welcome the fact that the FSB have launched the investigation because we have to get to the bottom of whether there was an “insider trading” and whether anybody benefited materially from prior knowledge of the former finance minister’s firing.

IGI confirms investigation into ‘intelligence report’ leading to the firing of Pravin Gordhan

Note to Editors:  Please find copies of the correspondence between David Maynier MP, DA Shadow Minister of Finance, and Dr Sethlomamaru Dintwe, the Inspector-General of Intelligence, here and here.
The Inspector-General of Intelligence, Dr. Sethlomamaru Dintwe, has confirmed that the origins of the “intelligence report” that reportedly led to the firing of former Minister of Finance, Pravin Gordhan, will be investigated.
On 31 March 2017 I wrote to the Inspector-General of Intelligence, Dr Dr. Sethlomamaru Dintwe, requesting him to:
…investigate inter alia whether the ‘intelligence report’ was produced, or disseminated, by any element within the national intelligence structure, or whether any element within the national intelligence structure played any role in the production, or the dissemination, of the ‘intelligence report’, and if so, whether same amounted to a violation of the Constitution, any law, any regulation and/or any policy applicable to the national intelligence structure in South Africa.”
The request followed reports suggesting that President Jacob Zuma acted on a bizarre “intelligence report”, claiming the former minister intended to use an international investor roadshow to mobilise people to overthrow the state, as a pretext to cancel the former minister’s international investor roadshow and to request his immediate return to South Africa.
On 05 April 2017 the Inspector-General of Intelligence, Dr. Sethlomamru Dintwe, replied as follows:
You are advised that the matter is under investigation and I will revert to you in due course.”
We welcome the investigation because we need to get to the bottom of whether any element within the national intelligence structure played any role in the production or dissemination of the bizarre “intelligence report” reportedly used as a pretext for the cabinet reshuffle which pulled the plug on the economy and triggered “junk status” in South Africa.