Legal threats fly in messy SAA sale saga

 ·2 Apr 2024

The Department of Public Enterprises (DPE) is busy exploring “all legal avenues available” to respond to an adopted draft report by the Portfolio Committee on Public Enterprises looking into allegations of irregularities in the cancelled South African Airways (SAA)/Takatso Consortium sale.

The report, adopted on 27 March, recommends that the claims be looked into by the Special Investigating Unit (SIU) as the committee said that they are unable to prove or disprove irregularity accusations.

However, the DPE said that it “will protect its integrity” through litigation because they viewed the report as a “concoction of lies and deceit’ meant to confuse the public… [and is] riddled with conjecture, fabrications, distortions and lies aimed at impugning the reputation of the DPE, its staff, and that of its executive political head, Minister Pravin Gordhan.”

What’s in the report

Originally, there was an agreement that 51% of the state-owned airline would be sold to private consortium, Takatso, for R51 on the condition that, over time, the group would inject R3 billion of capital in the form of a shareholder loan.

However, this collapsed during a time that coincided with mounting allegations by the former DPE Director-General (DG), Kgathatso Tlhakudi

Allegations made by the former DG include that Takatso was not initially on the list of companies that submitted bids, the assets of SAA were undervalued, certain individuals interfered and handpicked Takatso as the preferred bidder, and some signatures in the sale documents, including his own, were forged.

The committee attempted to investigate this, and ultimately conducted the draft report.

However, the report said that insufficient evidence and documentation was provided to either prove or disprove the allegations and that they did not have the capacity to properly investigate.

Thus, it recommended that the matter be referred to the SIU for further investigation.

DPE’s legal warnings

The allegations by Tlhakudi, the report, and the subsequent call for an SIU investigation to prove or disprove the allegations, irked the DPE, who said that it “will not allow a legitimate process of accountability to be hijacked for political shenanigans ahead of an election.”

Ahead of the committee’s meeting on 27 March, Minister Pravin Gordhan sent members a confidential letter saying that if they were to adopt and publish the report, the department would take it on judicial review.

However, the committee decided to give the report the green light, which has now been sent to the National Assembly for consideration.

In response, the DPE released a statement saying that the “conclusions of the portfolio committee in the report are inconsistent with the mandate given to the Committee by the Speaker.”

The DPE further alleged that the committee was a vessel to open the door for “Mr Tlhakudi to keep altering his false narratives to hoodwink the public” and described him as “a disgruntled former employee who has been surreptitiously put on a pedestal by the Committee to absolve himself through lies.”

The department’s statement also strongly criticised the committee’s chairperson, ANC MP Khaya Magaxa.

“The public should not be bamboozled to think the Committee chair has acted without bias and with due care,” said the DPE. “Even from its recommendations, it is clear that the report is a concoction of lies and deceit through which it seeks to confuse the public and absolve the former DG.”

The DPE said that “Mr Magaxa has misappropriated for himself the power to discount and disregard critical submissions by the DPE in order to create a contrived notion about the DPE’s supposed culpability while absolving an individual who has shown a penchant for dishonesty, malice and fabrications.”

Furthermore, the department criticised the entire committee, accusing it of ignoring the facts in favour of unfairly attacking the DPE and delaying actions for political show and convenience by “ben[ding] over backwards to entertain new lies by the former DG.”

The full letter by the DPE can be read below:

Parliament’s response

During the committee meeting, MPs were unified in expressing their disdain towards the legal threats and utterances by the department, saying that the committee would “not allow” Gordhan or the DPE to dictate how they should perform its oversight function.

ANC MP and committee member Nkosinathi Dlamini said that “as the legislature arm in terms of the doctrine of separation of powers, we oversee the executive.”

“They don’t oversee us [and] we don’t account to them [and] if we continue this exchange between us and the department as if the department must tell us how to conclude on this matter, it will not take us any way forward,” he added.

The committee released a subsequent statement expressing “frustration with the delays and lack of cooperation it received in the investigation from the Minister… in providing key documentation related to the transaction,” however, acknowledged the information that it did eventually receive.

EFF MP and committee member Nqobile Mhlongo said that “if the minister feels like he should take the committee report to court for review, he is more than welcome to do so.”

“I don’t think [the committee] appreciate[s] the drama he put us through to get the reports we had asked [from] him” she added.

The report now sits on the desk of the acting speaker, who is expected to table it to the rest of Parliament; however, when (or to an extent if given the threat of litigation) this would occur, is still up in the air.

Read: Parliament calls for probe into collapsed SAA-Takatso deal

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