Home South African Unions to call on Scopa for answers on alleged ‘dodgy’ Takatso deal

Unions to call on Scopa for answers on alleged ‘dodgy’ Takatso deal

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The deal clearly violates the Public Finance Management Act, say labour.

Takatso is set to provide R3 billion in funding and aviation management expertise for the new airline in return for a 51 percent stake in SAA. Picture: Karen Sandison, ANA.

AS TAKATSO Consortium on Thursday welcomed Finance Minister Enoch Godongwana’s recent public support for its acquisition of a 51 percent interest in SAA, labour unions are wanting answers from the standing committee on public accounts (Scopa), saying the deal clearly violates the Public Finance Management Act (PFMA).

This as South Africa is reeling from the revelations contained in the Zondo Commission, with state capture leaving state-owned enterprises on their knees.

Takatso said on Thursday, “With the support of National Treasury and the Department of Public Enterprises, this brings us a step closer towards reaching financial close of this milestone transaction in the aviation sector. We remain committed to a strong partnership with the government and to see this transaction concluded successfully.

“The proposed transaction has been structured in a manner that provides SAA with the greatest chance of success and allows for appropriate risk and reward sharing between the public and private partners of the new SAA on a continuing basis,” it said.

The transaction is subject to various approvals and pre-conditions, including from the Competition Commission and the Civil Aviation Authority.

Takatso said decisions regarding the future management of SAA would be taken by a newly formulated board in due course.

Key to the new operating model would be a lean and agile cost structure endorsed by the consortium’s commercial and technical partners and advisers.

A minimised cost structure would enable flexibility to ensure competitiveness, with a focus on fleet, maintenance and staff costs.

It said the SAA brand had suffered over the years with resultant significant loss in market share when it went into business rescue in December 2019. To recapture the lost market share, a strong brand awareness strategy would form part of the implementation plan.

On Tuesday, the Department of Public Enterprises confirmed that the government would be responsible for SAA’s historic debt of R8.4 billion.

In June, the government entered into a sale and purchase agreement with Takatso Consortium, formed by Harith General Partners and Global Aviation.

Takatso is set to provide R3 billion in funding and aviation management expertise for the new airline in return for a 51 percent stake in SAA.

However, DA MP Alf Lees said this week that the party would lodge a formal complaint with the parliamentary ethics committee regarding the failure of the public enterprises minister and finance minister to provide SAA information requested by the members of Parliament.

“This refusal to provide information on the basis that it is commercially sensitive just does not fly,” Lees said.

This as Engineering News reported that the National Treasury had said it was not consulted on the sale of the stake, and remains in the dark about a number of other agreements such as Takatso’s proposed issue of preference shares to the Department of Public Enterprises (DPE).

On Thursday Zazi Nsibanyoni-Mugambi, the president of the South African Cabin Crew Association, added to this call. “We are writing a letter to Scopa in order for them to address our concerns. We want to address Scopa,” she said.

She said the unions needed transparency on the deal. “We haven’t seen the due diligence. We don’t know the terms. People must be held accountable not only for the cheap sale of the airline, but as the DPE for placing SAA in this position.”

Phakamile Hlubi-Majola, the spokesperson for the National Union of Metalworkers of South Africa (Numsa), said on Thursday, “The PFMA is explicit. The entire deal and deals of state-owned enterprises (SOEs) must be publicised. There has been nothing transparent about this deal. It is as clear as mud and dodgy,” she said.

”If this was Mosebenzi Zwane (former minister of mineral resources) doing this under the administration of former president Jacob Zuma, we would all be outraged. But because it is a deal by Pravin Gordhan (Public Enterprises Minister) under the administration of President Cyril Ramaphosa people are quiet as if this normal. It is not normal. It is abnormal.

“It is a SOE and there has been no public process and no parliamentary process about the future of SAA. How did they decide Takatso was the right consortium to purchase SAA? What due diligence did they take and why was it not transparent? There is no accountability from Minister Gordhan. He is selling state assets. Why do we allow this as South Africans?”

Hlubi-Majola also slammed the sale of SAA of the supposed “R51”, saying “this is disgusting”. She said 2,300 workers had lost their jobs in the restructuring. “There are families going starving.”

Hlubi-Majola added: “Why do we have to accept the word of a minister without the relevant bodies such as Scopa playing its oversight role and holding Gordhan to account? Numsa views the sale of this SOE as unlawful.”

On Wednesday, the Institute of Directors in South Africa slammed SAA for appointing Professor John Lamola as both the executive chairperson and chief executive of the soon-to-be-privatised airline.

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