18.4 DUDU MYENI
The delinquency case involving Dudu Myeni, the former chairperson of South African Airways (SAA), is one of South Africa's most prominent examples of director delinquency under the Companies Act.
Background
Dudu Myeni served as Chairperson of South African Airways from December 2012 until October 2017. During her tenure, SAA faced significant financial instability and allegations of poor governance and mismanagement.
Delinquency Proceedings
In 2017, civil society organizations OUTA (Organisation Undoing Tax Abuse) and the South African Airways Pilots' Association (SAAPA) brought a case under Section 162 of the Companies Act to declare Myeni a delinquent director.
The Companies Act allows courts to declare a person a "delinquent director" if they:
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Grossly abused their position.
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Took personal advantage of company opportunities.
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Acted with gross negligence, willful misconduct, or breach of trust.
Key Allegations
The applicants, primarily led by OUTA and the SAA Pilots' Association, argued that Myeni:
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Interfered in management decisions.
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Caused severe financial harm by canceling and altering significant deals, including a transaction with Emirates Airlines and a fleet procurement agreement with Airbus.
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Breached fiduciary duties and corporate governance standards repeatedly.
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Acted recklessly and caused substantial harm to SAA’s financial stability.
Court Findings (2020)
On 27 May 2020, the Pretoria High Court found Myeni guilty of:
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Gross abuse of power and breach of fiduciary duties.
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Recklessly obstructing and interfering with crucial transactions.
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Engaging in conduct that endangered the airline's survival.
The court declared Myeni a delinquent director, barring her from holding any directorship for life. The judge emphasized that Myeni had repeatedly disregarded governance principles, leading to substantial harm to SAA.
Impact of the Judgment
This judgment was the first high-profile case in South Africa where a former director of a major state-owned enterprise was declared delinquent under the Companies Act. It serves as a landmark ruling emphasizing accountability, corporate governance, and directors' fiduciary duties.
Consequences
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Myeni is banned from serving on any company board for life.
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The judgment sent a strong message to the market and state entities regarding corporate governance standards and director accountability.
Significance
The Myeni delinquency ruling is frequently cited as an essential precedent to demonstrate the consequences directors face for misconduct and reinforces the legal framework protecting companies and public resources from mismanagement or corruption.