Gordhan and Godongwana contradict each other over SAA sale to Takatso

Public Enterprises Minister Pravin Gordhan and Finance Minister Enoch Godongwana have publicly contradicted each other over the sale of 51% of the South African Airways (SAA) shares to the Takatso Consortium.

SAA’s Takatso deal

This after National Treasury director-general Dondo Mogajane, in a letter to parliament’s Standing Committee on Public Accounts (Scopa), said the department was not involved in the selection of the private consortium to take over SAA.

This is despite Gordhan insisting that officials from both departments were part of the intensive consultations, regarding the Takatso transaction that was negotiated last year.

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The Democratic Alliance (DA) on Tuesday called on Scopa chairperson Mkhuleko Hlengwa to agree to their request for Godongwana and Gordhan – as well as the director generals of both departments – to be called to appear before parliament’s finance watchdog to account for the contradictions.

In a written reply to Scopa, dated 7 April 2022, Gordhan flatly denied Mogajane’s claim that the Treasury never played a role in the selection of Takatso.

“In a letter to Scopa, National Treasury indicates that it was not involved in the selection process for the SEP (Strategic Equity Partner for SAA).

“The letter from the minister of finance to the minister of public enterprises referred to above clearly contradicts this view,” the DA quoted Gordhan as saying in his letter.

The selected quote apparently referred to a letter written by Godongwana on 4 February 2022. It was presented by Gordhan in reply to Scopa to back up his assertion that Treasury was involved in the Takatso deal.

PFMA requirement

According to the Public Finance Management Act (PFMA), the concurrence of the minister of finance is required when a state-owned entity like SAA disposes of an equity stake.

Gordhan disagreed that he was obliged by law to consult Godongwana because the disposal of a majority shareholding in SAA had already been approved by Cabinet.

The Takatso Consortium owns 51% of the national airline while the Department of Public Enterprises retained 49%.

‘Serious aspersions’

DA MP and member of Scopa, Alf Lees, said Gordhan’s letter to the committee seemed to confirm Mogajane’s statement that the Treasury was not involved in the selection process of Takatso.

He said the letter cast “very serious aspersions” on the integrity of the Treasury. He said it would likely have serious implications for South Africa in both domestic and international financial markets.

“This possible damage to the reputation of the National Treasury must be dealt with promptly and publicly to establish the facts that will either establish that National Treasury was completely honest with Scopa or will establish that urgent intervention is required to restore the integrity and reputation of the National Treasury,” Lees said in a statement.

Lees said whether it was Gordhan or Mogajane who had misled Scopa, the “guilty party” should face severe consequences for disdaining Parliament.

Terms and conditions of deal

Lees also raised concerns that the terms and conditions of the deal with Takatso remained secret.

“The most glaring omission by Pravin Gordhan is his complete failure to provide details of the terms and conditions contained in the agreements entered into by the Department of Public Enterprises with the Takatso consortium that the National Treasury have concerns about.”

He said Gordhan did not provide copies of the agreements entered into between his department and Takatso.

“This is a serious omission on the part of Pravin Gordhan that must be dealt with thoroughly and in public by Scopa to ensure that there is no malfeasance involved in the agreements entered into between the Department of Public Enterprises and the Takatso consortium.

“It is vital to establish that the deal is in the best interests of all South Africans and not just with the selected Takatso consortium beneficiaries.”

Compiled by Thapelo Lekabe

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