SAA board rejected advice on R15bln loan, picked Free State agency, inquiry told

SAA's former head treasury set out in significant detail how a year-long process saw the board reject a company called Seacrest to provide a R15 billion loan and went with the Free State Development Corporation.

A screengrab shows SAA's former head of treasury Cynthia Stimpel at the state capture inquiry on 13 June 2019.

PARKTOWN - The state capture commission of inquiry has heard how the South African Airways (SAA) board unilaterally rejected the recommendations related to a R15 billion loan and instructed that the finance be obtained from the Free State Development Corporation (FDC).

This was part of the submission by the national carrier's former head of treasury Cynthia Stimpel on Thursday.

The commission was dealing with allegations of corruption and irregular deals in the aviation industry with a particular focus on SAA.

Stimpel set out in significant detail how a year-long process led to a company called Seacrest being recommended to the board to provide a R15 billion loan, but the board rejected it and made an entirely unexpected decision.

“It makes a recommendation for us to go with funding for a company called FDC, which was Free State Development Corporation, and the mandate is given to the acting CEO and the interim CFO to go ahead and sign the deals to make sure this loan happens.”

She said the board reached this decision based on a letter which was circulated at the meeting, which was highly irregular.

“So, for a board to have made that decision and put it into a board resolution showed immediately that they obviously wanted FDC in without going through the proper governance process.”

Stimpel said the FDC did not have the mandate to fund state-owned entities and national projects.


Stimpel said she was misled by the bid adjudication committee when she signed off on a financial advisory contract without the full facts being placed in front of her.

She said she signed off on a deal with BNP Capital but evidence leader advocate Kate Hofmeyer revealed facts which had not been placed before Stimpel at the time.

“If they had not submitted a BBBEE certificate, would that have been a concern?”

Stimpel responded that: “Yes, definitely, it would’ve been a concern.”

BNP was recommended after proposing a cost of only R1 to SAA but this was not conveyed to Stimpel.

“Definitely, I would’ve said there is something wrong here. How can you go in and put in a bid for R1 and excluding that, there’s something very wrong with that.”

The board approved BNP’s appointment.