South Africa's Public Enterprises Minister Pravin Gordhan has reacted defiantly to a court ordering him to decide on a rescue bid for stricken state-owned budget carrier Mango Airlines (MNO, Johannesburg O.R. Tambo), saying he will not be bullied or pressured into a decision.
He was responding to a South African High Court order on September 6, limiting him to 30 days to accept or reject a ZAR326 million rand (USD17 million) secured offer for Mango from South African consortium Ubuntu Air Services. The minister has been delaying the process since the bid was submitted to him in December 2022 by Mango's business rescue practitioner Sipho Sono, who took legal action to compel Gordhan to reach a decision.
In his response, Gordhan said he was studying the court judgment and would proceed based on legal advice. He stressed he would "not be cowed to submit to pressure that certain elements, with zero regard for public interest, sought to exert on him" regarding the business rescue process of Mango Airlines, a subsidiary of South African Airways (SA, Johannesburg O.R. Tambo).
Gordhan said he could not make a decision based on insufficient information. He has requested additional information from the potential investor, including a detailed business plan to assess the consortium's viability, comprehensive due diligence, and foreign ownership details to comply with South African laws. However, Sono rejected Gordhan's request, arguing that sufficient information had already been provided.
"My duty as the executive authority is to safeguard the interests of South Africans. At no point will I abandon my fiduciary responsibility to ensure that any decision that is taken regarding the future of Mango is consistent with the prescripts of the law and is in the best interest of the public," Gordhan stated.
"The issues around this case evolve around my request for further information from the business rescue practitioner. This is what the Public Finance Management Act (PFMA) requires in order to make a judiciously sound decision. I will not be bullied to act in a manner that will compromise the work of government in this regard," he said.
In his ruling, Pretoria High Court acting judge AJ Phooko deemed Gordhan's stance as "unlawful and constitutionally invalid", characterising it as "an unreasonable delay".
He also rejected Gordhan's argument that the PFMA supersedes the country's Companies Act, which regulates business rescue proceedings. He affirmed that Sono, as the business rescue practitioner, had the ultimate authority in managing Mango Airlines. "The BRP, who is in full control of the management of the affairs of Mango Airlines, has responded to the effect that he will not supply any additional information. Consequently, the PE Minister, as the relevant treasury, must act with the information at his disposal and either approve or reject the application," the judge said.
