Waiting game for OUTA as Myeni strikes back

News24 - Tuesday 3rd December, 2019
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OUTA will hear on December 12 in the the High Court in Pretoria whether it has standing to be part of a case to have former South African Airways chair Dudu Myeni declared a delinquent director and prohibited from being a director of any other firm for several years.

OUTA may have to cough up

On Monday Judge Ronel Tolmay reserved judgment until December 12 in a special application brought by Myeni, claiming the law does not make provision for OUTA to bring such a "delinquent director" case in terms of the Companies Act.

OUTA, on the other hand, claims it has the right to do so in the public interest, because SAA is a state-owned enterprise, using taxpayers' money.

"The case will involve the same witnesses and the same evidence, whether OUTA is a plaintiff or just SAAPA. In the end it will have to be determined if OUTA is entitled to relief and if the court finds they are not, then there might be a cost order against them," the judge said.

'Publicity stunt'

On behalf of Myeni, advocate Nqabayethu Buthelezi argued that for OUTA the case is a mere "PR excercise" and "publicity stunt", which the court should not condone. In the view of Myeni's legal counsel, a party cannot act against directors by saying it is acting in the public interest, since the relevant companies legislation does not provide a "public interest" option.

On behalf of OUTA and SAAPA, represented by the same legal counsel, namely advocate Carol Steinberg, it was argued that OUTA does indeed have the right to be part of the case, which it was argued arises constitutionally when there is corruption or a lack of proper management at public entities.

"SAA is a major public entity and the public has an interest in all public entities. SAA is the recipient of a shareholder guaranteed loan issued by the state. Technically SAA is insolvent. OUTA, therefore, seeks the leave of the court to bring this case in the public interest because of a breach of good governance (by Myeni)," it was argued on behalf of OUTA.

'Protecting the public'

"The aim of OUTA is to protect the public, to say this person is not fit to be a director of a company for seven years or even longer. It is to protect the public and other companies. When it comes to state-owned enterprises, there is a particular public interest to ensure a person does not sit on the board of another SOE - otherwise Myeni could be on the board of Eskom, for example, unless the court makes an order against her.

"Taxpayers have a direct interest in the directors that manage SOEs."

Tolmay at some point asked Myeni's counsel whether he did not think he was jumping the gun by bringing such a special application at this stage, given that at the start of the main application the plaintiffs would have to show why they have standing in the matter anyway. The judge wanted to know how it would change the situation for Myeni on a practical level by not having OUTA as a party to the case, since the same case and legal representation is presented for both OUTA and SAAPA.

Earlier on Monday, Tolmay ruled that Myeni cannot change her previous admissions in the main case and cannot have other previous SAA directors added to her case. Her legal team last week introduced an application to change some of her previous admissions in the case, and have 28 other directors who served with her at the flag carrier included in the case on the basis that they acted as a "collective".

READ: High Court rules Myeni can neither change plea nor add other SAA directors to her case

Her lawyers argued last week that her previous legal representation did not give her correct advice or consult with her properly, and she should be able to amend her plea. The admissions that Myeni sought to amend chiefly relate to the results of board meetings and business decisions taken under watch.

The main case against Myeni has repeatedly been delayed after she said she struggled to secure legal representation and afford funds to appear in court, and later submitted the application to amend her plea.

OUTA has previously said it believes this is part of an ongoing strategy to delay the case against Myeni.

Myeni is not taking it lying down. She filed a notice of motion on Monday stating that she intends to ask the court to declare allegations against her made by OUTA on October 3 this year as false and defamatory, and unlawful and to delete the tweet.

The tweet - which at the time of publication was visible on @OUTASA's Twitter account - alleges that Myeni caused "damage" at SAA. It also notes that she sat on several other boards, and suggests that she may have "done damage" elsewhere, before asking for "support" for the organisation's "cause".