DA takes action to have Gordhan account for cancelled SAA/Takatso deal

14 March 2024

Following the inevitable cancellation of the controversial SAA/Takatso deal yesterday by the Minister of Public Enterprises, Pravin Gordhan, the DA has today written to the Chairperson of the Portfolio Committee on Public Enterprises, Hon Khaya Magaxa, to request that Gordhan appears before Parliament, prior to its rising towards the end of this month, and account on the now canceled SAA/Takatso deal.

Gordhan must provide a detailed account, including supporting documents, of the due diligence conducted by his Department on:

The valuation of SAA, especially its projected future earnings – indications are that SAA was sold using an undervalued valuation;

The viability of the Takatso Consortium as a potential equity partner, especially its ability to raise the required capital to meet the purchase agreements.

Gordhan cannot hide behind ‘changed circumstances’ as an excuse for canceling the SAA/Takatso deal.

He knew it was a bad deal from the beginning hence his insistence on hiding the details of the sale and purchase agreements from the public, including the nefarious attempts to muzzle Parliament through non-disclosure agreements.

In addition to holding him accountable over this dud SAA/Takatso deal, Gordhan must explain how SAA will sustain itself after the 18 month period, through which he says SAA will be able to cover its operating costs. The DA will fight against any attempt to raid the Treasury for another multi billion rand bailout, those freeloading days are over.

There is no strategic need for a state run airline that diverts limited state funding away from the desperate need to stimulate economic growth. SAA must be cut loose and be sold.

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Gordhan and Ramaphosa’s Cabinet must be held accountable for the ‘dud’ SAA/Takatso deal

13 March 2024

The announcement by the Minister of Public Enterprises, Pravin Gordhan, that the ‘dud’ SAA/Takatso deal has been cancelled was inevitable given that it was a bad deal from the beginning. Gordhan’s stubborn insistence on keeping details of the deal secret and the Takatso Consortium’s insistence for more taxpayer funds before the deal could be consummated, were clear red flags.

Gordhan, together with President Cyril Ramaphosa’s Cabinet – who collectively approved the deal, must now be held accountable for failing to exercise due diligence before entering into sale negotiations with Takatso. They all failed in their fiduciary duties as custodians of a state asset and should bear responsibility for any losses that taxpayers may have incurred during the period when the deal was supposedly in force.

The taxpayer took on all SAA’s massive liabilities of some R15 billion leaving SAA debt free with considerable assets including a respected brand all of which had a likely value that exceeded R7 billion. For 51% of this debt free SAA to be sold for R51 was outrageous and a slap in the face of taxpayers.

The DA will be demanding that Gordhan tables the contract termination documents that he entered into with Takatso to terminate the deal. After spending years refusing to release the purchase agreement, South Africans at least deserve to know the reasons behind the termination of the dud SAA/Takatso deal.

Today’s announcement is an epitaph to what has been a disastrous tenure for Gordhan as the Minister of Public Enterprises. His announcement that he will be resigning at the end of the current administration is a little too late as he has left a trail of destruction in his wake. SAA will once again become a burden on the South African taxpayer because he failed to exercise due diligence in finding a viable partner for the airline.

SAA is now a clear example of how the ANC government has mishandled SOEs and drove most of them to the brink of bankruptcy. There is no strategic need for a state run airline that diverts limited State funding away from the desperate need to stimulate economic growth. SAA must be cut loose and be sold.

Issued by Mimmy Gondwe, DA Shadow Minister of Public Enterprises, 14 March 2024