Is the Takatso consortium holding the 51% stake in SAA for speculative purposes?

15 November 2022

Note to editors: Please find attached soundbite by Ghaleb Cachalia MP.

The resignation of Gidon Novick from the board of SAA's chosen equity partner, the Takatso consortium, citing concerns about the consortium's ability to raise enough money, raises serious concerns on whether the consortium is hoarding its 51% stake in SAA for speculative purposes.

The DA will now write to the Competition Commission requesting that they investigate whether the Takatso Consortium entered into the SAA deal under false financial pretenses and are simply unable to raise the requisite equity to fulfill their end of the agreement.

Since the announcement of this so-called SAA/Takatso deal, the Minister of Public Enterprises, Pravin Gordhan, has been evasive and has refused to be transparent on the finer details of this supposed deal. This has not only created uncertainty on the viability of the transaction but it has also led some to speculate that Gordhan might have rushed into this deal without conducting due diligence on the Takatso consortium.

When SAA appeared before the Standing Committee on Public Accounts (SCOPA) today, they made the spurious claim that they cannot release documents for the deal because "negotiations are at a sensitive stage". This is just a continuation of the tactics that have been used by the SAA and Gordhan to evade accountability.

For quite some time now, my colleague, Alf Lees, who sits in SCOPA has been asking for the release of copies of the SAA/Takatso deal and the total equity that the Takatso consortium has injected into the deal since SAA restarted operations on the 23rd of September 2021. His requests have been flatly ignored.

With the resignation of Novick, who was a key figure in the Takatso Consortium and his bombshell revelation about the consortium’s ability to raise money, the Competition Commission is empowered, in terms of the Competition Act, No 89 of 1998, to investigate whether this transaction violated competition law through misleading representations.

By continuing to hold out its 51% stake in the SAA deal with the misplaced hope that the taxpayer will continue to pick up the debt and operational costs, while failing to pay part of its equity agreement, renders Takatso’s position nothing more than a speculative business transaction.

South Africans cannot afford to continue to be strung along by a consortium that is clearly unable to pay its way in fulfilling its obligations under the SAA deal. If the country was sold a dud by Gordhan and Takatso, the Competition Commission should use its statutory powers to determine the appropriate course of action.

Issued by Ghaleb Cachalia, DA Shadow Minister of Public Enterprises, 15 November 2022