DPE considers legal action over leaks on the SAA/Takatso deal

The Department of Public Enterprises (DPE) is seeking legal advice on whether it should take action on the alleged leaking of official information relating to the South African Airways (SAA)/Takatso deal.

Fin 24 last week reported that the department’s Minister Pravin Gordhan allegedly cut out advisors and failed to consult with National Treasury on the impending SAA/Takatso deal.

“The department is seeking legal advice on action to be taken on the leakage of official information and the peddling of false and distorted information about this process,” said the DPE in a statement.

The article also alleged that Gordhan and some of his officials flew solo on the selection of Takatso as a strategic equity partner for SAA, contrary to the widely held impression that RMB was the transaction advisor on the deal. 

The DPE has since clarified: “The Rand Merchant Bank (RMB) has been appointed as a transaction advisor to select a Strategic Equity Partner (SEP) for SAA.”

The department says RMB has already undertaken the first phase of the evaluation process which included the initial evaluation phase of expressions of interest.

Background SAA/Takatso

On 24 August 2020, Harith General Partners notified the DPE of its interest in becoming a bidder.

RMB then contacted Harith the following day to formally join the process.

“The second and third processes were conducted by the department. The second and third processes entailed the selection of shortlisted parties to enter into strategic discussions on the potential fit and the
commencement of due diligence, negotiation and signing of transaction agreements,” said the department.

The DPE then entered into a non-disclosure agreement with Harith, prohibiting the disclosure of any details related to the process.

The DPE was at pains to emphasise that the Covid-19 pandemic had a devastating effect on global aviation, which became increasingly debilitating worldwide.

“As a result, some of the parties who had expressed an interest in the process could not provide the capital required to operate the airline.

All interested parties made it clear that the government had to take responsibility for all historic costs inclusive of bank debts,” said the DPE.

According to the department, out of all interested parties, (which the DPE has not disclosed) Harith General Partners was willing to provide the funding for the new airline.

It then partnered with Global Aviation for aviation management expertise, and it formed Takatso Consortium.

The case of the suspended DG

“There is misinformation in the media space that the suspended Director-General was not involved in the SEP process. This is incorrect,” clarified the DPE.

Now suspended DG Kgathatso Tlhakudi, was actively involved in engaging with local and international parties wishing to invest in SAA.

He was intimately involved in the SAA transaction and further engaged with the media in the process.

“Only the Sale and Purchase Agreement was signed by the Acting DG on the 22nd of February 2022 as the DG was on sick leave, but he was privy to the sale and purchase agreement and its contents or terms and conditions.”

Tlhakudi also communicated the outcome of the expressed interest to the parties. Furthermore, the letter of acceptance of Harith General Partners as the preferred bidder for SAA was signed by the DG.

“The Department would like to condemn the deliberate misinformation that is being spread about the transaction and processes of acquiring the SEPs for SAA.

“This distortion of facts negatively impacts and compromises the process,” concluded the DPE.

NOW READ: Treasury concerned about SAA deal with Takatso Consortium