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South African Airways Seeks to Recover $4 Million From Former CEO Ngqula

South African Airways Ltd., the country’s national carrier, said it’s seeking to recover 30.8 million rand ($4 million) from former Chief Executive Officer Khaya Ngqula after claiming he spent its money on friends and awarded contracts to companies in which he had an interest.

An investigation by accounting firm KPMG showed Ngqula went beyond his duties in increasing retention bonuses for some employees and sponsoring the Association of Tennis Professionals and professional golfer Angel Cabrera, the airline said. Ngqula took friends and associates to the soccer and rugby world cups and a tennis tournament in Monte Carlo, according to an e-mailed copy of a letter from KPMG to SAA Chairwoman Cheryl Carolus.

“The board has resolved to institute action against Dr. Ngqula for the recovery” of his unauthorized excess expenditure, the Johannesburg-based company said in an e-mailed statement.

Several calls to Ngqula’s mobile phone seeking comment didn’t connect.

SAA paid Ngqula 9.35 million rand to end his contract in March 2009 after the South African Transport & Allied Workers’ Union asked for an investigation into procurement practices. Since 2001, the government of Africa’s biggest economy has paid chief executives of state-owned enterprises severance packages worth a total of 262.1 million rand as they were fired, suspended or while the company was running at a loss, the opposition Democratic Alliance said on its website.

While heading South Africa’s biggest airline from 2004 to 2009, Ngqula awarded portions of three jet-fuel contracts to suppliers in which he had an interest, KPMG’s letter said.

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

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