Parliamentary committee clashes with Gordhan over SAA

 ·29 Feb 2024

The parliamentary portfolio committee responsible for overseeing the Department of Public Enterprises is at loggerheads with the minister, Pravin Gordhan – primarily over key documents relating to the sale of a 51% stake in South African Airways (SAA) that is in the pipeline.

Tensions flared in the lead-up to and during the committee’s meeting with the minister on February 28.

The meeting was around accusations of impropriety leveled against the minister regarding the shortlisting of Takatso as SAA’s preferred strategic equity partner as well as the sale contracts – with both parties reportedly accusing one another of “bullying”.

Last week, chairperson of the Portfolio Committee on Public Enterprises, Khayalethu Magaxa, wrote a scathing letter to Gordhan – responding to several claims and requests made by the minister for the committee’s meetings.

The letter slammed an alleged absence of access to certain documents, the minister’s desire for MPs to sign non-disclosure agreements (NDAs), and his request for the committee meeting to be held in private.

MPs signing an NDA

One of the most contentious issues was Gordhan’s request for all MPs involved to sign NDAs.

“Members of Parliament serve at the behest of the people of South Africa and cannot be muzzled on matters of public interest,” said Magaxa.

The chairperson said that the information that the committee is requesting “not for personal gain, but for a legitimate public purpose.”

“The committee will not agree to a Non-Disclosure Agreement whose terms are only known to you as this would amount to unjustified suspension of the constitution…. [and] cannot be expected to keep quiet and walk away where there is evidence of malfeasance in the transaction under review” he added

Missing documents

In a letter dated February 20, Gordhan wrote that the only documents in relation to the sale of SAA that the committee has not received from the department are the Evaluation Report of RMB and the Sale of Shares Agreement.

Magaxa refuted this saying this was “plainly incorrect” as the minister had neglected or refused to furnish the committee with a shortlist of selected entities from which a final determination was made.

The chairperson added that the committee wanted all of the documents by the February 28th meeting, and failure to do so would result in the committee “explor[ing] every available legal avenue to vindicate its constitutional rights.”

The minister and his department have fiercely refuted these claims by the committee, saying that “the Department of Public Enterprises (DPE) has done everything according to the prescripts of the law.”

“Any attempts to continue casting aspersions about the integrity of the transaction are meant to sidetrack the public from the hard work that has gone into saving SAA… there is no information that is within our legal remit to provide on the SAA transaction that the DPE has withheld from Parliament,” said the DPE in a statement made in December.

According to News24, at the end of the private meeting on 28 February 2024, Gordhan handed over several confidential documents; however alleged that the committee had bullied him.

Magaxa pointed the finger right back at Gordhan, saying that their actions pale in comparison. “Bullying is a very small word. ..we were bulldozed; It was bigger than [bullying],” he said.

Closed-door meeting

Magaxa said that the committee has become accustomed to requests from Gordhan for in camera [private] meetings.

Whilst it had rejected the request for an NDA, it accepted the minister’s request for a closed door meeting on 28 February.

Magaxa then stressed that “the acquiescence to an in camera [private] meeting with you should not be read as an exaltation of secrecy above accountability, particularly where public funds are involved.”

At the meeting, Magaxa said that the agenda was “actually to [just] receive documents from the minister, but there was a feeling from his side that it should be an in-camera meeting.”

The two parties reached an understanding that the first session of the meeting would be used to determine whether the contents of the documents qualify to be an in-camera kind of meeting.

After receiving the sale and purchase agreements signed with Takatso and the shortlist of bidders, the committee said that it would refer the documents to its legal advisers to determine whether the next meeting with the minister (6 March) should be closed-door or open to the media and the public.

Brief background of the sale

The Takatso transaction has been controversial since it was announced by Gordhan in June 2021, indicating that the company would acquire 51% of SAA for R51.

It would, however, make an injection of R3 billion over three years in the form of a repayable shareholder loan.

The terms of the evaluation caused speculation about whether the state would receive fair value for the airline that was grounded for two years due to business rescue and the pandemic.

Gordhan announced that another valuation exercise would be conducted in September 2023, but neither assessment has been made public.

Read: State companies rack up the losses as taxpayers sink R325 billion into bailouts

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