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Phumeza Nhantsi says wasn’t aware Treasury blocked SAA funding from FDC

The corporation was SAA's choice to source funding but was shut down by Treasury because it did not have the mandate to provide the airline with funding.

A YouTube screengrab shows Phumeza Nhantsi at the state capture inquiry on 18 June 2019.

JOHANNESBURG – Former South African Airways (SAA) CFO Phumeza Nhantsi said she was not aware that National Treasury met with the Free State Development Corporation and blocked them from funding SAA.

The corporation was SAA's choice to source funding but was shut down by Treasury because it did not have the mandate to provide the airline with funding.

Nhantsi testified at the Zondo Commission of Inquiry on Tuesday about how the board, chaired by Dudu Myeni, wanted to appoint the Free State Development Corporation to source the R15 billion to finance its debt.

But the deal was scrapped by the National Treasury.

Despite being the CFO at SAA at the time, Nhantsi said she was not aware of this.

“The formal communication between the National Treasury and SAA is via the chairperson of the board, the National Treasury would write to the SAA. So, one of the reasons perhaps we engaged and we didn’t stop at that time, they never wrote to us and said FDC doesn’t have a mandate.”

Nhantsi claimed she later realised she was being used as a political pawn after she discovered that FDC's board chairperson was African National Congress secretary-general Ace Magashule's sister.

LISTEN: Zondo Commission hears how Dudu Myeni made unilateral decisions at SAA

WHISTLEBLOWING

Nhantsi said she never thought about blowing the whistle on financial management misconduct at the SAA.

She was suspended in 2018 after a disciplinary hearing found her guilty of gross financial misconduct and dishonesty.

This was in relation to a R49 million cancellation fee she recommended the SAA board pay to BNP Capital after the airline scrapped the process to appoint them as transactional advisers to secure them the R15 billion loan.

Nhantsi said she thought of becoming a whistleblower but decided against it.

“This was the first time I left the accounting practice and I’m in the corporate space. So, blowing will not be the first thing coming to my mind. I did ask about reporting these things and what would happen.”







BNP CAPITAL'S LICENCE ISSUES

Nhantsi said BNP Capital misled the airline's supply chain team when they submitted their financial services board license without declaring they had issues with it.

Despite being involved in the project to secure a R15 billion loan, Nhantsi said she was not aware BNP Capital's licence was suspended.

The company would have secured over R250 million in fees if it had landed the contract.

Nhantsi said she had no reason to suspect the company's licence was invalid.

“Their letter was saying we informed you on 12 May and in our response, we said we never received it can they specify and give it to us. They never responded on that.

Deputy Chief Justice Raymond Zondo was concerned about this.

The commission resumes on Wednesday.

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