Matshela Seshibe, the CEO of Air Chefs, the in-flight catering arm of South African Airways (SAA), has proposed a mutual separation with the state entity following a guilty verdict in an internal disciplinary process. Seshibe was found guilty on four out of six allegations by a disciplinary hearing panel led by retired labour court and labour appeal court judge president Basheer Waglay. The allegations include increasing salaries for three employees without board approval, resulting in irregular expenditure and a breach of the Public Finance Management Act.
The guilty findings relate to Seshibe's approval of salary increases for three employees, including Zandile Mzilikazi, whose salary was adjusted by about 18.4% last year, and Mphume Spayile, who received an increase of 28.57% in excess of the prescribed policy threshold. Seshibe was also found to have breached company policy by not disclosing a close professional relationship with Mzilikazi, triggering concerns of a conflict of interest. Seshibe stated that he and Mzilikazi previously worked together before joining Air Chefs and emphasised that there was no romantic relationship.
Seshibe has written to Air Chefs board chair Mongezi India and SAA board chair Sedzani Mudau, proposing a mutual separation by agreement. If accepted, this would mark the end of Seshibe's contract, which had two years remaining out of his five-year term as Air Chefs CEO. Seshibe joined Air Chefs in October 2022 on a five-year contract. He was placed on special leave in August while acting as SAA group CEO, and his acting contract was terminated at the end of August.
In his letter to the judge president, Seshibe stated that he was exploring the possibility of a mutually agreed separation on terms that are fair, reasonable, and acceptable to both parties. He emphasised that his proposal does not constitute a resignation or unilateral termination of his employment and is not intended to circumvent the disciplinary process or diminish the seriousness with which the company has approached the matter.
Seshibe attributed the salary increases to a discretionary internal benchmarking exercise. However, the internal disciplinary report found that his conduct resulted in irregular expenditure and a breach of the Public Finance Management Act. The report also highlighted that Seshibe failed to follow the legal framework of the company in approving the ad hoc remuneration adjustments.
Seshibe is also a board member of President Cyril Ramaphosa's foundation. His proposal for a mutual separation comes as Air Chefs and SAA face huge challenges, including operational, financial, and organisational demands that require leadership attention. Seshibe's letter to the judge president did not constitute a resignation, notice of resignation, or unilateral termination of his employment.
The disciplinary findings have significant implications for Seshibe's future at Air Chefs. If the proposal for a mutual separation is accepted, it will bring an end to his tenure as CEO. The developments at Air Chefs have raised concerns about governance and accountability within the state entity. The boards of Air Chefs and SAA will need to consider Seshibe's proposal and determine the next steps for the company.
Key points
- Seshibe found guilty on four allegations, including breach of Public Finance Management Act
- Seshibe proposes mutual separation with Air Chefs and SAA
- Seshibe's contract had two years remaining out of his five-year term as Air Chefs CEO
