SAA Board Rejected Advice On R15BN Loan, Picked Free State Agency: State Capture Inquiry






South African Airways’ Head of Financial Risk Management Cynthia Stimpel testifies at the State Capture Inquiry.

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 financial risk head 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.