South African Airways Plans Inquiry After CEO Investigation

The board of South African Airways said it will convene a formal disciplinary inquiry into the conduct of suspended Chief Executive Officer Monwabisi Kalawe.

The decision was made after an investigation by law firm Edward Nathan Sonnenbergs into allegations of misconduct, the board of the Johannesburg-based, state-owned airline said in an e-mailed statement Thursday. The board was advised by ENS and senior counsel, it said.

“It is not appropriate to divulge the details of the allegations against Mr. Kalawe at this stage,” the board said in the statement. Kalawe will respond via his legal team, he said by e-mail.

SAA is surviving off state-guaranteed loans, which the Treasury increased to 14.4 billion rand ($1.2 billion) in January. It’s more than half way through a 90-day turnaround plan aimed at reducing costs and operating without help from the government, which has refused the carrier’s bailout applications. Its net loss widened to 2.55 billion rand for the year through March 2014, and the carrier foresees another loss for fiscal 2015, it said in January.

Kalawe will remain suspended until the inquiry convened before an independent external chairman, Nazeer Cassim, who is a senior member of the Johannesburg Bar, is finished, the board said.

The allegations relate to “serious misconduct” ranging from non-compliance with “critical policies and procedures” on supply-chain management, job evaluation, recruitment and selection and delegation of authority, as well as not complying with legislation including the Public Finance Management Act, the board said.

Kalawe is also accused by the board of gross misrepresentation to the public enterprises minister and failure to always act in the best interests of SAA.

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