Pretoria-based firm sues govt over R51 sale of SAA

Pretoria-based investment firm Toto Investment Holdings wants to halt the sale of a majority stake in South African Airways (SAA), for R51, to the Harith-backed Takatso Consortium. The company filed papers at the High Court in Pretoria on Thursday to stop the deal it views as opaque.

Toto founder Bongani Gigaba reportedly said his firm was unfairly excluded from the deal and claimed it was a victim of an unlawful and secretive process. Despite the department of public enterprises issuing a statement about the deal a few weeks ago, suspicion and uncertainty surrounds the nature of the deal.

When pen is put to paper the consortium will own a 51% majority stake in SAA, for R51, and invest in working capital over two years of R3 billion.

According to reports on the filing, Toto alleges that it had filed an expression of interest in SAA, but that it was rejected quickly.

ALSO READ: EFF threatens legal action over SAA sale to Takatso Consortium

Public enterprises spokesperson Richard Mantu said: “The department is studying the court papers and will oppose the application.”

The Takatso Consortium also includes Global Aviation, parent of airline Lift. SA Flyer Magazine editor and aviation commentator Guy Leitch called the litigation “a hugely important development”.

Organisation Undoing Tax Abuse (Outa) chief executive Wayne Duvenage said he was not surprised that someone has decided to challenge the deal legally.

“This deal has been shrouded in secrecy and has been lacking in transparency from the outset,” said Duvenage.

“Unless the government provides all the information relating to SAA’s financial status and how the state arrived at its valuation of the airline, the public and other potential investors will always question the deal.”

Leitch added that the department of public enterprises has played their cards too close to their chests, and their refusal of transparency just raises questions.

“The door is wide open for accusations that the airline will be sold off for next to nothing and that the airline could be worth as much as R 10 billion,” he said.

ALSO READ: ‘Fiscal drain’: SAA has cost SA R49 billion – Godongwana

While government said it would oppose the court action, aviation analyst Phutego Mojapele suggested that South Africans support Toto’s application, which he said he applauds.

“This is a true reflection of what most South Africans are experiencing. People are tired of the secrecy that surrounds government decision-making, especially where it matters most, the public purse,” he said.

“It seems that decisive action is finally being taken by someone.”