The Organization Undoing Tax Abuse (Outa) has revealed shocking proof that the financial group hired by the South African Airline (SAA) was paid R256 Million for services it was not in a position to offer.
Civil action group Outa stated this at a press conference on Friday (8 July) proving that boutique financier was not in the position to receive the whooping sum of R256 million paid to it by the state-owned airline.
Report has it on Thursday that SAA had not repented from engaging in dubious financial practices by awarding a R256 million award to a boutique financier without undertaking the necessary tender processes required of it.
According to report by BDLive, the SAA board waived tender procedures for the contract – against advice from its own treasury – and ended up paying three times what it had to for services.
BnP Capital, the financier, was earlier hired to advise SAA on the restructuring of its R15 billion debt and the company advised that it be hired, urgently, to raise the financing itself, securing a 1.5% success fee in the process.
However, in Outa’s report, after receiving a number of tip-offs about the illegality of the deal, it reached out and uncovered evidence that the deal was illegal and cannot move forward.
Outa pointed out that BnP lacks a finance license, which should have excluded it from consideration altogether.
“As part of the criteria, the company ought to have a Financial Services Board (FSB) license. This company had its license suspended,” it said.
Outa found out from the FSB that BnP Capital’s license had been suspended for “possible serious transgressions”. Despite this fact, the documentation in the deal had a check mark next to the license.
Outa also revealed that BnP Capital is not trading from its registered address and that names were cancelled, approval documents, and other signatures added– and then put forward as having “full board approval”.
This deal is just the latest the SAA was caught up in, the group noted.
“SAA has previously addressed issues through financial institutions at (a cost of) R5 billion, where the projects could be addressed though R170 million and R214 million,” Outa said.
‘Come lets Compile these Evidence against SAA’
Outa however called on “more whistle blowers” to come forward so that it could compile all the evidence to challenge the SAA – and other government institutions suspected of corrupt activities – in court.
The group noted that it would soon be exposing the road construction contracts,“We will do whatever we can to remove those involved in wrongdoing from office.” Outa lead, Wayne Duvenage said