The partial privatisation of South African Airways (SA, Johannesburg O.R. Tambo) is under the spotlight again following revelations it does not have the sanction of the country's National Treasury.
The public spending watchdog Standing Committee on Public Accounts (SCOPA) has given SAA's shareholder representative, Public Enterprises Minister Pravin Gordhan, 14 days to provide more clarity about his deal to sell off 51% of SAA to the Takatso Consortium. "This is to ensure that when the committee meets to discuss the matter it is well informed of all the material facts and explanations required," SCOPA said in a statement.
This follows after Treasury Director-General Dondo Mogajane threw a curveball at Gordhan when he informed SCOPA that National Treasury had "played no role in the selection process of the preferred Strategic Equity Partner (SEP), including the conceptualisation, negotiation, and the finalisation of the terms and conditions relating to the transaction".
He said National Treasury had raised concerns about some of the terms and conditions agreed to between Takatso and the Department of Public Enterprises (DPE). "It must also be noted that the National Treasury was only consulted after the DPE had concluded the memorandum of understanding and agreed on the principles of the transaction with the selected SEP," he said.
Mogajane was unable to vouch for the compliance of the process followed by the DPE; neither had National Treasury consented to the transaction as legal advice had indicated regulatory irregularities in the transaction, he said.
He pointed out that "the disposal of a majority shareholding in SAA has already been approved by Cabinet and no approval, concurrence, or noting is required from the Minister of Finance in terms of the Public Finance Management Act".
The opposition Democratic Alliance (DA) has submitted a written parliamentary question to Finance Minister Enoch Godongwana to disclose what concerns National Treasury had with the Takatso transaction and what action it took to deal with these.
DA SCOPA representative, Alf Lees, said it should be remembered that former finance minister, Tito Mboweni, had opposed government bailouts to SAA, but was bypassed by Gordhan, who had simply taken the 51% SAA share disposal directly to the Cabinet for approval.
As reported, the South African Cabinet on February 24 announced that a sales and purchase agreement had been concluded between the DPE and the Takatso Consortium, which comprises black-empowerment equity firm Harith General Partners and ACMI specialist Global Aviation Operations (GE, Johannesburg O.R. Tambo), which owns the domestic Lift Airlines (GE, Johannesburg O.R. Tambo) brand. The next step involves the approval of the transaction by various regulatory bodies.
