Home South African SAA sale ‘dampens’ Cyril Ramaphosa’s investment push

SAA sale ‘dampens’ Cyril Ramaphosa’s investment push

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Public Enterprises Minister Pravin Gordhan announced the Takatso Consortium, a private equity partner chaired by Tshepo Mahloele as a successful bidder late last year.

Public Enterprises Minister Pravin Gordhan. Picture: GCIS

By Mashudu Sadike and Siphokazi Vuso

AS THE SALE of South African Airways’s (SAA) major stake continues to be marred by secrecy, the revelation that Treasury played no role in the disposing of the 51% of the government’s shareholding comes as a dampener to President Cyril Ramaphosa’s investment conference pledges.

Public Enterprises Minister Pravin Gordhan announced the Takatso Consortium, a private equity partner chaired by Tshepo Mahloele as a successful bidder late last year.

The consortium included Mahloele’s Harith General Partners and aviation group Global Aviation. Mahloele owns Arena Holdings, the publisher of newspapers such as Sunday Times, Sowetan and Business Day.

While Gordhan kept South Africans in the dark about other bidders, Treasury Director General Dondo Mogajane recently stated in Parliament that the National Treasury had played no role in the selection process of the preferred Strategic Equity Partner including the conceptualisation of the terms and conditions relating to the transaction.

He told the Standing Committee on Public Accounts (Scopa) that the Treasury never gave any consent to the transaction nor could it vouch for the compliance of the process followed by the department of public enterprises in this regard, reported TimesLive.

This despite the Treasury having pumped billions of rands from the public purse in SAA bailouts over the years including when Gordhan was finance minister.

Policy analyst Nkosikhulule Nyembezi said: “The revelation to Scopa comes as a dampener to Ramaphosa’s investment conference pledges. South Africans expect the Cabinet and government departments to work in concert on strategic investment decisions geared towards unlocking broader economic development opportunities for the country. To hear that the Treasury was not properly consulted by the Department of Public Enterprises raises questions regarding the ability of our government to attract and retain investor-confidence in the South African economy.

“How Parliament deals with this shocking revelation will be watched closely as SAA has already benefited from billions of rand in the form of bailouts. We can only hope that the government is not already contemplating putting more money into the entity as the Treasury’s disclaimer is disappointing in the least and disappointing at the most, especially to hundreds of families left jobless as a result of the economic inviability of SAA.”

Scopa also wants clarity from Godharn’s department following Mogajane’s remarks, with chairperson Mkhuleko Hlengwa confirming that the committee had written to the department, giving Gordhan 14 days to respond.

“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.”

The Presidency has seemingly dodged this publication’s questions about Dondo’s revelations, referring queries to Gordhan’s department.

Acting Presidency spokesperson Tyrone Seale said the Department of Public Enterprises will elaborate in due course on this matter which was processed by Cabinet.

The department’s spokesperson Richard Mantu also could not answer our questions too, saying Scopa has asked the department to brief them on the agreement and it would be inappropriate to answer to Scopa through the media.

African People’s Convention leader and former Scopa chairperson Themba Godi accused Gordhan of being a law unto himself.

“We oppose the privatisation of state-owned entities because it consolidates the hand of neo- liberalism. Partial privatisation of SAA was deliberately well calculated on the part of capitalist riders in the ANC led by Pravin (Gordhan).

“When Pravin first announced it the President (Cyril Ramaphosa) expressed ignorance of that deal and now it has come to the fore that he was not involved which means this transaction was illegal and had no political sanction. The transaction must be reversed.”

Although the DA agreed with the privatisation of SAA, the party questioned the legitimacy of the contract and the secrecy around it.

Its MP Alf Lees said: “The DA wants the contract and concerns made public to determine whether the contract is legal or should be reversed if the legal processes were not followed and if the terms and conditions are unacceptable. Apparently Takatso has not been able to raise the required R3,5 billion. Yet SAA is clearly looking at further bailouts to keep SAA going given that it is apparently losing in the region of R600 million per month.”

The EFF condemned the decision to privatise SAA, with spokesperson Sinawo Tambo saying: “The partial privatisation of SAA by giving away public strategic assets to comrades in the ruling party and their handlers is a deliberate and well-orchestrated manoeuvre to strip the state of its strategic assets.”

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