Stimpel blew the whistle on a corrupt deal at South African Airways, exposing her to surveillance and dismissal before she was vindicated by the Zondo Commission
Cynthia Stimpel’s appointment to head the treasury department of South African Airways should have been the culmination of a successful corporate career spanning four decades. Diligent work had seen her rise through major institutions including Barclays Bank, Citibank, and First National Bank, before joining SAA as Head Financial Risk Manager. A decade later, she was running the entire department as Group Treasurer – and it was from that position that she blew the whistle on a corrupt deal that had made her working life untenable.
SAA was regarded as something of a challenge when Cynthia went to work there in 2006 – South Africa’s national airline had made some bad financial decisions earlier in the decade and been damaged by exposure to currency fluctuations. The enterprise was in debt and in need of additional financing. Staff turnover within the organisation was high, particularly at senior levels.
In March 2016 the airline’s board appointed an unknown finance company, BNP Capital, to advise it on raising R15 billion (£737m) in funding, with an advisory fee of R2.8 million (£138,000). This surprised Stimpel, who had been working on more conventional – and cheaper – means of consolidating SAA’s debts, but had been repeatedly stymied by the board.
At the time the SAA board was chaired by Dudu Myeni, a politically powerful businesswoman who had the ear of the then-president, Jacob Zuma. A month earlier Myeni had famously told a meeting of senior SAA executives, including Stimpel, that it was “our turn to eat”.
In her book, Hijackers on Board Stimpel describes a series of decisions by Myeni that are difficult to align with the interests of SAA as an organisation. On her watch, SAA’s board became increasingly involved with operational matters and regular decision-making structures were increasingly being side-stepped.
The following month the board passed a resolution to expand BNP Capital’s role from transaction advisor to include sourcing the funding. Stimpel was asked to sign a board submission to support awarding the contract to BNP Capital without going out to tender, for an initial success fee of R300 million (£14.7 million), later amended to R256 Million (£12.6 million) – an enormous sum for an organisation that was already in dire straits.
Stimpel refused to sign. She said tender processes weren’t being followed, the fee was vastly inflated, and she didn’t think SAA needed the service at all. The following week she went abroad on leave, only to find that the submission had been signed in her absence.
Stimpel decided to blow the whistle. First, she disclosed her concerns to officials within SAA – to the Executive Managers, the Chief Risk Officer, and the Head of Internal Audit. Then seeing no action being taken, she then reported the case to people she trusted in the national treasury, and backed up her concerns with evidence. A week later she submitted a complaint to South Africa’s ombudsman, the Public Protector. As the appointment of BNP Capital was imminent, Stimpel realised she could not wait for the outcome of a Public Protector investigation, so made an external disclosure to the civic rights group, OUTA (Organisation for Undoing Tax Abuse).
Shortly afterwards SAA suspended Stimpel for unlawfully accessing and disclosing company documents. Details of the BNP Capital deal were leaked to the media shortly thereafter, though not by Stimpel. A public outcry ensued, and within weeks SAA cancelled the contract.
In the months that followed Stimpel was subjected to relentless pressure. SAA were aggressively pursuing disciplinary charges against her, and she was placed under physical surveillance. Stimpel noticed unknown vehicles following her, or waiting outside her house. Angry at what had happened and depressed by the prospect of protracted court proceedings, on her lawyer’s recommendation, Stimpel accepted an early retirement separation agreement with SAA, which paid her a modest 6 month salary settlement, in May 2017.
That could have been the end of the story. However, in the context of emerging concerns about whole-of-state corruption, what happened at SAA was looking more and more like a prime example of a nationwide problem – politically well-placed forces extracting funds from the South African public on a massive scale.
Cynthia Stimpel testified to the Zondo Commission in June 2019 and was entirely vindicated three years later, when the inquiry released its findings. “Whistleblowers like Ms Stimpel are the final defence against corruption and state capture taking hold in SOEs,” the Zondo report concluded, lauding her commitment to stand up for what was right “at great personal cost to herself.”
The Commission also recommended that Dudu Myeni face criminal charges for corruption, fraud and revealing the name of a witness whose identity was being kept confidential. Following separate legal action initiated by the SAA Pilots Union, Myeni has been disqualified for life from acting as a company director, the judge concluding that “Ms Myeni is not a fit and proper person to be appointed as a director of any company, let alone a state owned enterprise.”
Congratulations to Cynthia Stimpel, winner of the 2022 Blueprint for Free Speech Special Recognition Award.
