NUMSA welcomes decision by Parliaments Portfolio Committee on Public Enterprises to refer the Takatso deal to the Police minister so the SIU can investigate the dodgy deal
29 April 2024
The National Union of Metalworkers of South Africa (NUMSA) welcomes the decision of the Portfolio Committee on Public Enterprises, to refer the Takatso deal to the Minister of Police so that the Special Investigations Unit (SIU) can investigate it further. The committee’s job is to play an oversight role on the Department of Public Enterprises, and it found that Minister Pravin Gordhan failed to conduct himself in an open, honest and transparent manner, with regards to the transaction. The minister attempted to bully the committee into keeping the deal a secret, even though there was absolutely no justification in doing so. SAA is a State Owned Entity, and every aspect of the deal must be open to the public to scrutinize. Gordhan did not follow proper processes when appointing Takatso as the preferred equity partner for SAA. NUMSA is vindicated by this decision because we consistently opposed the deal from the beginning and we raised the alarm early on to say the process was corrupted and therefore, the deal was tainted.
On the 24th of March the committee said the following in a statement about the deal,
“The committee also highlighted the importance of transparency and accountability when it comes to financial matters, particularly when there is a need for funding. It is crucial for the relevant parties to appear before the committee and provide necessary details to ensure proper oversight.
Furthermore, the committee is concerned about the undervaluation of South African Airways and the need for a comprehensive evaluation of the business. It is essential to address the sequence of events that led to the undervaluation and to investigate any potential corruption or misconduct in the process.”
The Committee is right to be concerned about the “under valuation” of SAA because we later found out that SAA was sold for a measly R51 to the Takatso consortium. DPE rejected offers for partnerships from established airlines with a track record to partner with a ‘no name brand consortium’, which had no money! This is why NUMSA has consistently said the deal “stinks of corruption” and an investigation is needed.
Furthermore, NUMSA has noted a letter which was published by BusinessLive from the CEO of RMB, Emrie Brown on the 21st of April, where she writes about RMB’s role in the Takatso Transaction. RMB was appointed to select a strategic equity partner for SAA. In the letter RMB confirms that it was appointed to advize on the selection of the equity partners for the sale of SAA and it terminated its mandate on the 1st of February 2021. The CEO confirms that the Takatso consortium was not among the organisations which was shortlisted by RMB to be an equity partner for SAA. In the letter she says,
“RMB wishes to clarify that we were not involved throughout the process. RMB terminated its mandate with the public enterprises department on February 1 2021, at which stage the Takatso consortium was not part of the potential list of strategic partners. RMB therefore did not engage, select or recommend the Takatso consortium as the strategic equity partner for SAA to the department of public enterprises.”
This is a very significant revelation by RMB because it simply re-affirms NUMSA’s view that the consortium was hand-picked by the DPE to become an equity partner. When you connect the dots it is very clear that the DPE, under the leadership of Minister Pravin Gordhan, was attempting to impose the dodgy Takatso deal onto the public, and they violated proper processes in order to do so. Gidon Novic, who represents minority shareholders in the Takatso consortium, confirmed that he was handpicked by an official of the DPE in an interview with Newzroom Afrika, and they were to receive a whopping 51% ownership of the airline. This is one of the major reasons why we say that the process was illegitimate. The Takatso consortium was made up of Harith General Partners and Global Airways.
Lack of funding for the airline creates uncertainty
The other burning issue is the question of funding for the airline. An amount of R3 billion was promised for SAA by the consortium and now that the deal is no longer going ahead, this leaves the future of the airline in limbo. We are concerned by the comments made by Derek Hanekom the chairperson of the SAA board, where he said in an interview with eNCA, that the opening of new routes would be delayed until a new equity partner was found. This is deeply worrying because if funding is not found, then SAA may find itself in another financial crisis. Gordhan messed up this deal and he must be held entirely responsible.
The state has a responsibility, as the shareholder to find willing equity partners, or to explore strategic partnerships which can enable the airline to recover, and to be sustainable in the long term. Workers at SAA have suffered enough because of mistakes made by politicians. Our members have paid the highest price in the form of job losses in order to turn this airline around.
We are aware that many workers at SAA are anxious about the future of the airline, and also, about the union particularly in light of the battles that NUMSA has been fighting against management on organisational rights at the airline. Many of them ask us when the union will be able to defend them again in the workplace. Fortunately NUMSA can confirm that it defeated SAA management at the Labour Court when they tried to interdict the CCMA arbitration on organisational rights. At the same time, NUMSA won its case at the CCMA and we have, once again, been granted organisational rights! We want workers to know NUMSA is back at SAA and we will be taking up this and other issues as well, on their behalf.
SAA management should work with us, instead of working against us. We have a common vision which is to save the airline and ensure its long term survival. They should stop wasting tax payer monies on over-priced lawyers and frivolous cases which undermine the constitutional right of workers to choose the union of their choice. They are wasting money at a time when the airline should be doing everything possible to guarantee its long term survival.
Issued by Phakamile Hlubi-Majola, NUMSA National Spokesperson, 29 April 2024
