The chairman of SAA's board, Cheryl Carolus, yesterday released an explosive report by auditing firm KPMG on the financial mismanagement of the national carrier.

Carolus said she had handed the report to the National Prosecuting Authority's Specialised Commercial Crimes Unit for further "investigation and consideration".

She said she would also be handing the report to the auditor-general and would brief parliament on the decision to summons Ngqula in a bid to recover the money.

NPA spokesman Bulelwa Makeke confirmed that the unit had received the report, but would not reveal whether its contents would lead to charges against Ngqula.

She said: "I can confirm that the Specialised Commercial Crimes Unit has received the dossier and it is receiving attention."

Carolus said SAA would demand that Ngqula return:

• R27-million paid to employees for retention sign-on bonuses in excess of the authorised amount;
• R3.3-million he authorised for the hiring of hospitality suites in various stadiums across South Africa; and
• At least R500000 for free junkets which he allegedly granted to friends for the 2006 Soccer World Cup in Germany, 2007 Rugby World Cup in France and the 2008 ATP tennis tournament in Monte Carlo.

The KPMG report also found that Ngqula had concluded a number of sport sponsorship agreements - the values of which were over the limit he was entitled to authorise.

"The limit was R1-million until November 26 2006 and R2-million after that," Carolus said.

She said Ngqula had concluded a contract to sponsor Argentinian golfer Angel Cabrera over a three-year period for R21-million, and a contract sponsoring the tennis ATP World Tour from 2006 to 2009 for R120-million.

Carolus said neither Cabrera nor the ATP were guilty of any wrongdoing.

"The board has referred this matter to its attorneys for further consideration as to whether SAA has any claims against any SAA employees or former employees involved in the conclusion of these contracts to recover the amounts expended by the company."

She said the KPMG report exposed "systematic weaknesses, shortcomings and gaps which we needed to fix. There were failures in procurement and certain irregular payments and non compliance with the Public Finance Management Act."

Carolus said the new SAA chief executive, Siza Mzimela, would have to work at tightening internal controls at the airline.

The investigation was commissioned by the previous board, led by Professor Jakes Gerwel, after the SA Transport and Allied Workers' Union compiled a dossier of allegations against Ngqula.

The previous board axed Ngqula in March last year, letting him go with a R13-million settlement.

The decision by the SAA board to pursue the matter drew widespread acclaim. Ngqula was not available for comment.

Satawu general secretary Zenzo Mahlangu said the union had been vindicated: "It was not a nice thing when we made the expose. Some people thought we were being personal, but there was a lot going on that was not supposed to happen."

He said the board should be applauded as they had done something "out of the ordinary and uncommon in South Africa".

The DA's spokesman on public enterprises, Manie van Dyk, also welcomed the decision to pursue civil claims against Ngqula, saying it was commendable and should become standard practice in South Africa and not an exception.

"It is still a matter of astonishment that he was paid a R13-million settlement despite being under investigation for mismanagement, conflict of interest and procurement irregularities," Van Dyk said.

Cosatu also welcomed the move.

Ansie Ramalho, executive director of the Centre for Corporate Governance at the Institute of Directors Southern Africa, said: "We may very well see such actions in future but our guess is that some of it will be inhibited by the fact that boards may in the process implicate themselves."

Ramaho said the same rules of governance rules applied to both private and public sector institutions.

"The exception is where a particular area is legislated," she said.

Source: The Times