{"id":876205,"date":"2026-09-18T13:18:40","date_gmt":"2026-09-18T11:18:40","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=876205"},"modified":"2026-09-18T13:18:43","modified_gmt":"2026-09-18T11:18:43","slug":"south-african-airline-ordered-to-pay-back-money-with-interest-on-unlawful-r85-million-contract","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/876205\/south-african-airline-ordered-to-pay-back-money-with-interest-on-unlawful-r85-million-contract\/","title":{"rendered":"South African airline ordered to pay back money, with interest, on unlawful R85 million contract"},"content":{"rendered":"\n

A South African airline that secured an unlawful lease extension from SAA has been ordered to repay profits or unjustified enrichment from the agreement, with interest.<\/p>\n\n\n\n

The Special Investigating Unit (SIU) has secured a ruling from the Special Tribunal that has set aside South African Airways’ (SAA) decision to extend a R85 million dry-lease agreement with local aviation company Flyfofa Airways.<\/p>\n\n\n\n

The Special Tribunal found that SAA\u2019s decision, through its board, to extend the lease without any procurement process or approval from the National Treasury went against Section 217(1) of the Constitution.<\/p>\n\n\n\n

About 10 years ago, SAA bypassed its standard procurement process to hand over its domestic cargo flights to Flyfofa.<\/p>\n\n\n\n

SAA went ahead with this despite its internal checks ranking Flyfofa as a high-risk option due to poor solvency and financial losses.<\/p>\n\n\n\n

In November 2016, SAA signed an official three-year agreement to dry-lease two Boeing cargo aeroplanes from Flyfofa until 2019.<\/p>\n\n\n\n

In July 2019, SAA extended the lease for another 36 months (three years) for one cargo aircraft.<\/p>\n\n\n\n

However, when SAA signed the extension in 2019, the aircraft was out of service and was not in use for part of the contract period.<\/p>\n\n\n\n

SAA continued to pay Flyfofa while the aircraft was not able to carry cargo and remained grounded.<\/p>\n\n\n\n

The Tribunal further found that the decision was not authorised by any properly recorded, approved and
reported deviation in accordance with Treasury Regulation 16A.6 and National Treasury Instruction Note
3 of 2016\/17. <\/p>\n\n\n\n

The decision was therefore declared unlawful and set aside on the grounds of legality.<\/p>\n\n\n\n

The Special Tribunal has ordered Flyfofa to provide a clear report on all costs and revenue incurred while the aircraft was grounded, including whether any substitute aircraft or alternative service was provided.<\/p>\n\n\n\n

The Tribunal gave Flyfofa thirty days from 11 September to provide the SIU\u2019s attorneys with this information.<\/p>\n\n\n\n

The Tribunal ordered Flyfofa to pay the SIU any profit or unjustified gains within 14 days, plus 11% interest from the date of the order.<\/p>\n\n\n\n

“This is a cost to the public”<\/h2>\n\n\n\n
\"\"<\/a>
Special Tribunal Judge Chantel Fortuin<\/figcaption><\/figure>\n\n\n\n

The tribunal that the SAA Board of Directors had made decisions which caused direct financial harm to the country.<\/p>\n\n\n\n

\u201cThis conduct has a cost, and it is not only to the SAA alone. This is a cost to the public,\u201d said Judge Chantel Fortuin.<\/p>\n\n\n\n

The Tribunal Registrar was directed to send the judgment directly to the Minister responsible for SAA and the current SAA directors and Board Chairperson to evaluate actions against those responsible for the 2019 contract extension.<\/p>\n\n\n\n

The judgment outlined ways to hold directors and officials personally accountable:<\/p>\n\n\n\n

    \n
  1. Financial Misconduct: <\/strong>Actions can be taken under the Public Finance Management Act (PFMA).<\/li>\n\n\n\n
  2. Director Disqualification: <\/strong>The Companies Act allows for the declaration of directors delinquent or their placement on probation.<\/li>\n\n\n\n
  3. Criminal Prosecution:<\/strong> Cases involving corruption can be sent to the National Prosecuting Authority (NPA) or the Hawks (DPCI).<\/li>\n\n\n\n
  4. Board Suitability: <\/strong>A review will be conducted to determine whether the involved directors should remain on the SAA Board.<\/li>\n<\/ol>\n\n\n\n

    The judge ordered the Minister to file a short report with the Registrar of the Tribunal within 90 days of the date of the order.<\/p>\n\n\n\n

    The report should confirm whether the steps have been taken and, if so, what the outcome was.<\/p>\n\n\n\n

    The SIU’s investigation was originally authorised by President Cyril Ramaphosa under Proclamation R2 of 2020 to probe procurement and governance irregularities at SAA.<\/p>\n\n\n\n

    “President Cyril Ramaphosa signed Proclamation R2 of 2020, authorising an investigation into certain
    allegations concerning the affairs of SAA, including the procurement of or contracting for Airbus aircraft
    and maintenance, repair and operations services.”<\/p>\n\n\n\n

    The SIU highlighted its continued efforts to recover financial losses suffered by State institutions.<\/p>\n","protected":false},"excerpt":{"rendered":"

    A South African airline that secured an unlawful lease extension from SAA has been ordered to repay profits or unjustified enrichment from the agreement, with interest.<\/p>\n","protected":false},"author":127,"featured_media":791500,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"failed","_sma_x_autopost_error":"Instagram publishing failed: Instagram returned HTTP 400: Media ID is not available","_sma_x_post_id":"2100907446591991920","_sma_facebook_post_id":"191437357620492_2209053173248415","_sma_instagram_post_id":"","_sma_x_attempts":1,"footnotes":""},"categories":[23],"tags":[26573,2610,26572,22680],"class_list":["post-876205","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-flyfofa","tag-south-african-airways","tag-special-tribunal","tag-the-special-investigating-unit-siu"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/127"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=876205"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876205\/revisions"}],"predecessor-version":[{"id":876237,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/876205\/revisions\/876237"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/791500"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=876205"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=876205"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=876205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}