VUYISILE Kona, the suspended South African Airways (SAA) board member and acting CEO, would not get a "golden handshake" following his removal on Monday from the board of the airline by Public Enterprises Minister Malusi Gigaba.
Board members of state-owned companies are usually appointed for a three-year period with their reappointment subject to review and renewal each year at the company’s annual general meeting.
"A golden handshake is off the table, SAA does not have the means for that and nor does it have the appetite," Mr Gigaba’s spokesman, Mayihlome Tshwete, said on Monday.
Mr Kona was suspended as acting CEO of SAA in January. This was after the board said it needed to investigate allegations that he might have contravened provisions of the Public Finance Management Act.
The airline has a history of paying departing CEOs handsomely, the most infamous being the R232m Coleman Andrews received in 2001.
Andre Viljoen received about R7m when he left and Khaya Ngqula was paid R8.9m.
"The minister had to act," Mr Tshwete said. " There was a request from Mr Kona to resume his board duties (after his suspension as acting CEO in January), but this was an impossible scenario, it would have been undoable.
"There has been a clear breakdown in the relationship between (Mr Kona) and the rest of the board. Mr Kona had "options and platforms for him to advocate for getting some board fees", Mr Tshwete said.
"He is entitled to pursue the argument to get board fees, but we have not committed to that nor are we considering that option."
Mr Kona was appointed chairman in September after much of the airline’s board resigned in protest over Mr Gigaba’s criticism regarding the delay in the publication of the airline’s financial statements.
A few weeks into the job, Mr Kona was selected to take up the role of executive chairman after the early exit of then SAA CEO Siza Mzimela.
Mr Kona was to occupy this unusual role until a replacement CEO could be found.
Signs of tension between Mr Kona and his fellow board members started to appear a few weeks after he took up the executive chairmanship.
A month later, SAA’s board members, uncomfortable with Mr Kona in his new role, wrote to Mr Gigaba to raise their concerns. The board advised Mr Gigaba that in the interests of sound corporate governance, Mr Kona be made an acting CEO.
An acting chairman was to be appointed until a new permanent CEO was found.
The board said it was important to separate executive and oversight roles.
This is not the first time that Mr Kona has left SAA. In 2006, he reached an out-of-court settlement, which led to his departure from the employ of the airline.
Thando Ngeno, an attorney representing Mr Kona, said he would meet with his client in the coming days and decide on a course of action. Mr Kona did not answer his cellphone or respond to a text message requesting comment.
The Department of Public Enterprises said Mr Kona’s removal from the board was not related to the yet-to-be-completed probe into his alleged misconduct. "It should be stated categorically that Mr Kona’s innocence or otherwise of the allegations against him as acting CEO had little bearing on the minister’s decision to remove him ."
Mr Gigaba had "considered it prudent and in the interest of SAA that there be stability, cohesion in the leadership of the airline ".
SAA is in the process of drafting a turnaround strategy that must be completed by the end of this month.
The strategy is a prerequisite for the R5bn guarantee the government extended to the carrier in October to allow it to borrow money and continue operating as a going concern.
Public Enterprises has undertaken to appoint a new CEO before the end of this month, and Mr Tshwete said the board had shortlisted five candidates.
Mango CEO Nico Bezuidenhout has been acting CEO until the post is filled permanently.