‘Electioneering has started’, says DPE after Gordhan slammed for refusing to disclose SAA sale details

The Department of Public Enterprises (DPE) has denied withholding the details of the South African Airways (SAA)-Takatso Consortium deal.

This is after it emerged that Public Enterprises Minister Pravin Gordhan refused to provide the legislature with key documents related the sale of SAA to Parliament.

The Portfolio Committee on Public Enterprises met this week to deliberates on evidence submitted by Gordhan into allegations of irregularities of SAA’s sale to Takatso.

Former Public Enterprises director-general Kgathatso Tlhakudi had alleged, in a protected disclosure, that Takatso’s acquisition of SAA did not follow the prescripts of the law.

Tlhakudi also alleged that Gordhan orchestrated the deal to benefit “a few privileged individuals” who were favoured by the minister irregularly as Takatso was initially not on the shortlist of potential strategic equity partners.

‘Critical’ documents

While some information of the deal – including terms of mandate as well as two due diligence reports –was submitted, MPs were told on Wednesday that Gordhan did not want to share a shortlist of bidders plus the sale and purchase agreement signed with Takatso with the parliamentary committee despite several requests.

The minister cited the confidentiality clauses that he entered into with other parties as a reason for not providing information.

But MPs raised concern the documents Gordhan failed to submit were “critical” for the committee to be able to test the veracity of Tlhakudi’s allegations.

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The committee also expressed concern about the non-transparency on the SAA transaction, pointing out that the lack of documentary evidence further cast doubt on whether the airline’s sale was indeed above board.

Parliament legal adviser, Andile Tetyana, who has been advising the committee throughout the process, reminded MPs that the Auditor-General’s office also noted that the DPE did not follow a transparent process regarding the transaction.

Tetyana suggested that the committee either write to National Assembly Speaker, Novisiwe Mapisa-Nqakula about Gordhan’s reluctance to cooperate, subpoena the minister to hand over the documents or declare it’s non-support for the sale of SAA as the deal was shrouded in secrecy.

Watch the meeting below:

The legal advisor further pointed out Gordhan had not suggested an in camera hearing with the committee.

The members of the committee criticised Gordhan for his arrogance and lack of accountability and resolved to report the minister to Mapisa-Nqakula as well as summoning the sale documents.

‘Commercially sensitive’

The department has since refuted claims of non-cooperation with Parliament.

In a statement on Thursday, the department said allegations that the sale was not done in a transparent manner were “malicious and patently false”.

“There is no information that is within our legal remit to provide on the SAA transaction that the DPE has withheld from Parliament. All our engagements with the Portfolio Committee attest to our commitment to cooperate fully on every aspect of our work,” the DPE said.

The department insisted that some of the information being requested was “commercially sensitive and confidential”.

“The DPE has always maintained that due to confidentiality undertakings pertaining to the aspects of the transaction providing some of the information would not be possible. At no point has the DPE been offered the option of presenting any of the requested information in camera.

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“The DPE, as the government shareholder representative, is legally bound to respect any confidentiality agreement it enters into so as to enable seamless engagement with entities that invoke confidentiality clauses to conduct their business affairs, especially those of a material nature.”

It further indicated that the structure of the transaction was being reassessed “in light of the current market conditions”.

“The DPE is constantly advised by lawyers on what the DPE can and cannot do or disclose.”

The department added that all necessary information will be made available once the deal has concluded.

“The DPE will account fully to Parliament. However, the DPE will not strengthen the hand of those who do not want to see any positive outcomes from this administration – and it is aware that electioneering has started.

Government’s plans to sell a stake in SAA to Takatso was announced after the airline was forced into business rescue in December 2019.

SAA exited the business rescue process in April 2021.

Takatso, which was formed by investor firm Harith General Partners and Global Aviation who own 80% and 20% of the deal respectively, is expected to pump R3 billion in working capital to the “new” SAA.

The deal between the DPE and Takatso will see the consortium acquire 51% of SAA for a meagre R51.

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