Your report "SAA finances give cause for concern" (Flight International, 28 October-3 November) says that my resignation was attributed by "government sources" to my "disastrous currency hedging strategy".
I am bemused by this, as the hedging strategy followed by South African Airways is not the domain of myself, or any one individual for that matter. It is a strategy contained in SAA's Treasury Policy and Control Manual. This manual is based on SAA holding company Transnet's own Treasury Policy and Control Manual and was subject to a review by the airline's internal and external auditors, and approved by its board of directors.
In essence the policy requires the airline to hedge a minimum of 70% of all its exposures, arising predominantly through purchase contracts, long-term loans as well as finance and operating leases, to which it is obligated. The actual percentage of exposures that has been hedged to date is 57%. The reason for this departure from policy is that a decision was taken by SAA to stop hedging when the rand showed no signs of retracting from its gains achieved, as well as the fact that it became increasingly volatile. This decision was ratified by the board.
My resignation from SAA was based purely on personal reasons.
Richard Forson
Johannesburg
South Africa
Source: Flight International
