31 May 2001
Statement by the Minister of Public Enterprises
The Minister of Public Enterprises has noted the report on SAA that appeared in the Business Day of 31 May 2001. In particular the remuneration that is purported to have been paid to Mr. Coleman Andrews, the former Chief Executive Officer of SAA, requires a public explanation. The Minister wishes to state categorically that Government had no part in the determination of Mr. Andrews' terms and conditions of employment, including the determination of his remuneration package. In line with sound corporate governance principles, this responsibility vests with the SAA Board and in particular the remuneration committee of the Board. The Minister wishes to emphasise that neither he nor his department had interacted directly with SAA on this matter. The Minister and the Department of Public Enterprises endorses full disclosure of the remuneration of all executives and non-executives of State Owned Enterprises in their Annual Financial Reports.
SAA is a subsidiary of Transnet and therefore any public queries pertaining to SAA have been directed via the Chairperson of Transnet. When concerns on the remuneration of Mr. Andrews and other governance issues were raised with the Ministry, the Minister immediately requested a response from Transnet. We are currently awaiting their response. These concerns were also raised by the Minister, in interactions with Swiss Air. The changes that have recently taken place at SAA are a direct of result of the concerns expressed by the Minister.
If indeed, it is proved correct that Mr. Andrews has earned such exorbitant amounts as indicated, then the South African public requires an explanation. The Minister is committed to ensure sound corporate governance in all entities where the state has an interest. To this end, the Minister of Public Enterprises is in the process of finalising shareholder compacts between government as a shareholder and the various State Owned Enterprises and their subsidiaries, to ensure a clear definition of roles and responsibilities of the respective parties. In this regard Cabinet approved the shareholder compact with Transnet on Wednesday, 30 May 2001. We subscribe to the principles of corporate governance included in the King report; hence we actively participate in the King II commission currently reviewing best corporate governance practices. In response to some of the concerns of governance at SAA, the Minister via Transnet has effected changes to the SAA board to ensure that its capacity has been enhanced. This has resulted in Mr. Don Ncube being appointed as the non-executive chairperson of SAA.
If it is found that any employee or former employee has acted outside the scope of authority, then decisive action will be taken against the parties concerned.
Enquiries:
Fani Zulu
Director: Communications
Ministry of Public Enterprises
082 451 0457