/ 21 March 2024

SAA-Takatso deal to be referred to SIU

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SAA's deal with Takatso collapsed last week. (Delwyn Verasamy/M&G)

Parliament’s portfolio committee on public enterprises will refer the matter of the Takatso Consortium deal for the purchase of a 51% stake in SAA to the Special Investigating Unit (SIU), the chairperson announced after its meeting on Wednesday.

This comes after a protracted battle over the past year fought during committee meetings, some held in camera, between Public Enterprises Minister Pravin Gordhan and the former director general of public enterprises, Kgathatso Tlhakudi, who alleged that the deal was unlawful. Tlhakudi filed a protected disclosure in which he claimed that SAA had been undervalued by at least R7  billion as part of its takeover by the consortium.

Tlhakudi claimed that terms of the agreement were withheld from him even though he was the accounting officer of the department because Gordhan failed to act in the national interest and instead struck a deal for the benefit of a few select individuals. He has also alleged that Takatso was not among the strategic equity partners on a shortlist provided to the minister.

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. He claimed he was sidelined to stop him exposing wrongdoing, while Gordhan said he was sanctioned for unethical conduct, including meddling in the appointment of a senior staff member.

Gordhan has hit back at the committee, saying the deal, which has since been terminated, was lawful, and labelling its deliberations on the way the sale of SAA to the strategic equity partner was handled, as a “kangaroo court”. 

He announced the termination of the deal last week after SAA was revalued and found to have grown by R4.1 billion since the sale agreement was struck in 2021, just after the worst of the Covid-19 pandemic when flights were grounded for 18 months. Negotiations to adjust the sale price to a market related value failed and the deal collapsed.

Committee chairperson Khaya Magaxa said in a statement on Wednesday that the matter was complex and required a “thorough and credible investigation.”

“Therefore, the committee recommends that the SIU and/or another relevant law enforcement agencies be tasked with further investigating this matter to ensure accountability and transparency,” Magaxa said.

He said the committee had agreed with Tlhakudi that Takatso Consortium was not included in the shortlist when Rand Merchant Bank (RMB) evaluated the expressions of interest from potential strategic equity partners.

“The committee seeks to understand the reasons behind RMB’s desire to be released from its role as the adviser on the purchase. Members of the committee said that, in future, parliament needs to play an integral and meaningful role in government transactions of this magnitude. The committee was also of the view that parliament should be part of overseeing deals in which state assets are to be sold to the private sector,” Magaxa said.

He said the committee had highlighted the importance of transparency and accountability when it comes to financial matters, particularly when there is a need for funding.

Magaxa said the committee was also concerned about the undervaluation of SAA and the need for a comprehensive evaluation of the business.

Reacting to the committee’s decision the public enterprises department defended Gordhan in a statement on Wednesday saying it was “appalled by the disingenuous way” Magaxa had allegedly “sought to mislead the South African public by insinuating impropriety” regarding the deal.  

The department said Magaxa had overstepped the bounds of the committee’s oversight role and “appears instead to have gone on what increasingly looks to be a rogue campaign to accuse and convict” the department and by extension Gordhan “of impropriety without a shred of verifiable evidence”. 

The department said that despite parliament’s legal adviser, Andile Tetyana, declaring in his briefing to the committee last week that he found no sign of corruption in the proposed transaction, Magaxa had now insisted that he would ask the speaker to institute an SIU investigation.

“When the speaker instructed the committee to look into a complaint by the former director general of the department, she was not giving Mr Magaxa any right to act carte blanche, and beyond his mandate. It is troubling that a legitimate process has been hijacked for political opportunism and for misleading the South African public,” the department said.

“In essence, Mr Magaxa has turned a legitimate oversight exercise into a kangaroo court at which the department and its staff have been slandered, denigrated, and pilloried for the sake of politicking.”

Gordhan wrote to Magaxa on Tuesday noting that the Takatso Consortium had not been “hand-picked” by him, and that it had been appointed through a process led by Tlhakudi.

In the letter, which was leaked to the Mail & Guardian and which the department’s spokesperson, Ellis Mnyandu, confirmed is authentic, Gordhan informed Magaxa that he had received legal advice that although the deal had been terminated, documents relating to the transaction remained confidential and must be dealt with in camera, consistent with the rules of the National Assembly.

He said he noted from a media statement issued by the committee on 14 March that it said it would continue to investigate the transaction and uncover the truth.

“I wish to indicate that the use of the phrase ‘uncover the truth’ is inappropriate as it implies that there was something untoward in this transaction … I refer once again to the department contention that there is nothing untoward in the transaction,” he wrote.

He added that the department is “extremely concerned” about what “increasingly appears to be a prima facie case of persecution and personal vendetta”.

In correspondence sent to Magaza, the department said it had included certified copies of a memorandum on the appointment of RMB as a transaction adviser and a memorandum update on the process for SAA advising potential partners and the next steps, both signed by Tlhakudi. It also submitted a briefing note by Tetyana, in which he provided a review of the transaction, and showed instances from the documentation furnished to the committee, which underscore the key role Tlhakudi had played.

“The actions of Mr Magaxa are inconsistent with the need to foster transparency, honesty, and integrity in an open society. Throughout the department’s engagement with Mr Magaxa it has become clear that his pronouncements and actions hark to a sinister agenda, which begs the question of Mr Magaxa’s true intent,” the department said.

​​Speaking to the M&G on Thursday, Magaxa said it was impossible for there to be a political or personal vendetta because he had  a “positive and mutual” working relationship with Gordhan. He said he was merely chairing the committee and voicing their decision as 

a collective after Tlhakudi alleged his signature had been forged.

Magaxa said after receiving Gordhan’s letter in which he pointed out that Tlhakudi’s signature was on the documents relating to the deal, the committee had received a letter from him alleging that his signature had been forged.

He said 100% of committee members across all political parties had then “unanimously agreed” that the matter should be referred to an organisation such as the SIU, which has the forensic capacity to investigate whether the signature is authentic. 

Asked whether the SIU had been asked to investigate, spokesperson Kaizer Kganyago said the unit had seen the media release but did not know when the committee would make the formal referral to investigate the matter.