Acting SAA board chairperson at centre of R200 million tender row

Cash-strapped national carrier SAA is facing a fresh scandal after its acting board chairperson, Thandeka Mgoduso, was implicated in a R200 million tender row.

Mgoduso is accused of personally engineering the awarding of the lucrative consultancy contract to 21st Century, a company with which she allegedly previously had a working relationship. She also allegedly submitted 21st Century’s name to SAA and had a number of secret meetings with the company’s executives before she strong-armed the national carrier’s supply chain management committee into awarding the contract, even though 21st Century “did not score the highest”.

This is contained in an internal SAA report seen by the Sunday Independent. The report was commissioned by the SAA Board’s chief risk and compliance officer, advocate Vusi Pikoli, and compiled by chief audit officer Siyakhula Vilakazi. Now, two of SAA’s major unions, SA Cabin Crew Association (Sacca) and National Union of Metalworkers (Numsa), want Mgoduso and the board investigated for alleged gross misconduct. The unions have also appealed to Public Enterprises Minister Pravin Gordhan to fire Mgoduso and other board members who were involved in the awarding of the deal.

The internal report revealed that Mgoduso recommended 21st Century, and later intervened on its behalf after the company failed to impress the bid evaluation committee (BEC). The BEC had scored 21st Century’s competitor, PE Corporate Services, higher. However, Mgoduso and fellow board remuneration committee member Jeff Rothschild allegedly summoned the two companies to make private presentations without involving BEC members. The presentations, however, did not form part of the Request For Quotation (RFQ) invitation sent to the two bidders.

The report states that Mgoduso later recommended to BEC that 21st Century be appointed as it had allegedly excelled in its presentation. Procurement specialist Shireen Subroyen and head of department for remuneration and benefits Vik Ramlugaan told the audit team that, based on the proposal, on paper, PE Corporate Services were rated higher, but following presentations made by both companies, 21st Century fared better. However, Vilakazi, in his report, found that the RFQ did not make provision for the bidders to be scored on their presentations.

“If this was meant to be the case, this was supposed to have been stated upfront in the RFQ documents. The presentation was made to Remco (Remuneration Committee). The Remco members present were Ms Mgoduso and Mr Rothschild. Remco members were not members of the evaluation committee,” he said. Vilakazi also established that BEC members weren’t invited to presentations. According to the report, the SAA human resources department sought external expertise to help it break an impasse on the newly proposed key performance indicators and key performance areas, which had been presented to Remco.

“During that impasse, it was then agreed that an external company should be brought in to facilitate the process and come up with a plan that would suit both parties. Then it was suggested that those in attendance should bring forward names of such companies,” said a highly placed source. It was at this point that Mgoduso allegedly flexed her muscles and started pulling strings in favour of 21st Century. According to the report, she sent an email to the company secretary on December 3, 2018 - and copied other Remco members - in which she forwarded 21st Century’s contact details.

She also allegedly, added the report, briefed 21st Century “from beginning to end as she had meetings with them”. Sacca and Numsa have written a letter to the board and Gordhan, dated September 25, 2019, demanding “the removal of all board members, particularly Mgoduso, who was instrumental in the awarding of the 21st Century tender, as well as all SAA employees who participated in this process”. The letter, seen by the Sunday Independent, raised concerns about Mgoduso’s “interference with the daily operations of SAA”.

On Friday, Sacca president Zazi Nsibanyoni-Mogambi said the findings of the report clearly showed that Mgoduso had paved the way for 21st Century to get the tender. “According to the report, she was instrumental in awarding the tender to this consulting company. The board sat on our request. We have raised the issue of Ms Mgoduso’s interference in the day-to-day operations of the airline. We also raised this issue with the Minister of Public Enterprises, Pravin Gordhan,” she said. Ironically, former SAA Board chairperson Dudu Myeni was forced out over allegations she interfered in procurement and day-to-day operational matters.

The internal report raised 10 questions, including why the matter/impasse was elevated to Remco and why it was not left with human resources, as well as the question of who had identified the three companies. 21st Century chief executive Chris Blair on Saturday defended the contract, maintaining there were no irregularities. However, he failed to answer specific questions sent to him, including those concerning the company’s relationship with Mgoduso and the meetings its executives allegedly had with her. SAA spokesperson Tlali Tlali failed to respond to questions sent to him at the time of going to print.