Not cleared for take-off: Minister of Public Enterprises Pravin Gordhan has come under fire over the sale of SAA. Photo: Phill Magakoe/AFP
Parliament’s portfolio committee on public enterprises on Wednesday adopted a report recommending allegations that the cancelled sale of South African Airways was unlawful be referred to the Special Investigating Unit for further investigation.
After months of to and fro on accusations of wrongdoing levelled against Public Enterprises Minister Pravin Gordhan by the former director general of his department, the committee resolved that it cannot say “the SAA-Takatso deal was above board” and that a forensic probe was therefore the way forward.
“The committee recommends that the minister of police should consider referring this matter to the Special Investigating Unit, for further investigation,” it said.
Gordhan has indicated that he will retire from government after the May elections and if the National Assembly adopts the report, and a criminal investigation ensues, his long career as a member of cabinet will end under a cloud.
The committee’s investigation of the matter was sparked by a protected disclosure by former director general Kgathatso Tlhakudi in October 2022 in which he alleged the deal was unlawful on several counts and amounted to state capture.
The terms were that a 51% stake in the troubled carrier would pass to Takatso for R51 but that the consortium would then put R3 billion into the business in the form of a shareholder deal, the details of which were never made public.
When pressed by the committee for the sale of share agreement, Gordhan insisted that it should be treated as confidential, along with the shortlist of bidders. He camped on this position after announcing the cancellation of the deal earlier this month.
The committee denied his request for members to sign non-disclosure agreements before seeing the documents.
The deal was terminated after SAA was revalued and found to have grown in value by R4.1 billion since the agreement was struck in 2021.
In the course of the committee’s investigation it was confirmed that Takatso was never on the shortlist of bidders provided to the minister after Rand Merchant Bank evaluated the expressions of interest from potential strategic equity partners, as Tlhakudi had claimed.
The former DG further claimed SAA had been undervalued by at least R7 billion as part of its takeover by the Takatso Consortium — which at the outset comprised Harith General Partners and Global Aviation — and here the committee’s report found support for his submission in the cancellation of the sale.
“From what is in the media, it appears that government buckled under pressure and walked away from the transaction because of this very reason. The figures which the [public enterprises department] had agreed to regarding the sale of SAA are worlds apart from the current valuations and this leaves much to be desired,” it said.
Gordhan countered re-evaluation was normal and necessary because of the operational improvements at SAA since the deal was inked.
He has insisted the sale was lawful and labelled the committee’s deliberations on the manner in which it was negotiated as “kangaroo court”. He denied Tlhakudi’s allegations that the terms of the deal were withheld from him, though he was the accounting officer of the department, and that he was pushed out of his job to stop him from exposing wrongdoing.
Tlhakudi was placed on precautionary suspension on 24 June 2022 and dismissed on 26 May 2023. He took the matter to the labour court but failed in his bid for reinstatement. Gordhan has maintained he was sanctioned for unethical conduct, including meddling in the appointment of a senior staff member.
The minister refuted Tlhakudi’s complaint to the committee that he was locked out of the negotiations of the merger and acquisition deal struck with Takatso. Gordhan listed the dates of at least five meetings between the department and the consortium at which he was present.
He also denied an allegation by Tlhakudi that his signature was forged in a memorandum signed on 8 April 2021.
On this date, the minister said, Tlhakudi wrote the following to Harith: “After due consideration, we are pleased to inform you that the DPE have progressed with your expression of interest in SAA Group to the next round being the due diligence phase.”
This letter, Gordhan told the committee, counters one of his key claims, namely that after the Rand Merchant Bank process concluded “Takatso and Harith were nowhere in the process of identifying the SEP”.
“In his own words in this letter, there had been ‘due consideration’ of Harith’s expression of interest in the SAA Group,” Gordhan submitted.
The portfolio committee’s report said Tlhakudi’s emphatic denial that his signature was authentic “presents a very serious dispute of facts which can only be resolved by an entity which has forensic capability”.
Gordhan, in a statement, accused the committee of going beyond its mandate in the interest of political expediency.
He said the chairman of the committee Khaya Magax overlooked critical submissions by both Gordhan and the department and “opened the door to Mr Tlhakudi to keep altering his false narratives to hoodwink the public”.
His office added: “The adversarial way that the committee has conducted itself during this exercise also indicates that the committee has never been interested in the facts but in castigating the DPE and ‘kicking the can down the road’ for political expediency and spectacle.
“Even though the committee is aware that Mr Tlhakudi was not telling the truth, its report is condoning his hypocrisy, exposing the committee to potentially aiding and abetting the obstruction of due process.”