An investigation conducted by the Portfolio Committee on Public Enterprises into allegations of irregularities in the South African Airways (SAA) transaction has been hindered by the non-cooperation of the Minister of Public Enterprises, Mr Pravin Gordhan, who refused to provide certain documents requested by the committee.
The committee was investigating allegations made by the former Director-General (DG) of the Department of Public Enterprises, Mr Kgathatso Tlhakudi, in a petition to Parliament that the sale of South African Airways (SAA) was orchestrated in an irregular manner by Mr Gordhan to benefit a few privileged individuals who were favoured by the Minister.
The portfolio committee said all affected parties were given an opportunity to state their side of the story and to submit all material evidence to support and counter the allegations brought before the committee. “The committee noted with concern that, despite writing numerous requests to the Minister of Public Enterprises to submit the relevant documents to counter the allegations made by the Former Director-General, the Minister has not submitted some crucial documents as requested,” the committee said in its report.
It also raised a concern that the documents that the Minister failed to submit were critical for the committee to be able to test the veracity of the allegations. This failure means that the committee has no tangible evidence to counter the Director-General’s allegations.
The committee believes that the lack of transparency on the sale of SAA and the lack of documentary evidence create more doubt about whether the transaction was legitimate. “The committee has acknowledged that the lack of clear regulatory framework for SEP transactions from the Department of Public Enterprises (DPE) has put government at risk with respect to the SAA transaction. The Minister was mandated by the Auditor-General to develop a framework, which still need to be submitted to the committee,” the committee said.
During a meeting today to consider the committee’s report, the committee Chairperson Mr Khaya Magaxa said the investigation was not an easy process. “When we took the task, we decided to be very patient with everyone and ensured that the process was open and fair to all the affected parties.
“Allegations are not always tested by one word against the other. The most important way to test the validity of allegations is evidence. With the DG, there was some form of evidence. This committee is unanimously agreeing that it is unable to provide unqualified support to the deal. The minister has not helped us, we only have the allegation. Hence we agree to take the matter forward and write to the Speaker that we cannot get any assistance from the Minister,” said the Chairperson.
Some members of the committee also raised concerns about the Minister’s failure to cooperate with the investigation and some suggested the establishment of an ad hoc committee to further investigate the SAA transaction.
“We are disappointed in the manner the Minister handled this matter, providing no credible response to the allegations by the former DG and making the work of the committee difficult. Let us request the Speaker to appoint an ad hoc committee to investigate the Takatso-SAA transaction in its entirety and the conduct of the Minister,” said committee member Ms Omphile Maotwe.
The outstanding documents requested from the Minister include (1) the shortlist of selected entities from which the final determination was made; (2) evaluation report performed by the Rand Merchant Bank (RMB) and (3) the share sale and purchase agreement.
Other committee members warned that there is not enough time for an ad hoc committee to finish any investigation before the end of the sixth Parliament. Parliamentary legal advisors said the committee has not exercised all its powers and that it can still subpoena the Minister in terms of section 56 of the Constitution.
Among allegations made by the former Director-General in his petition is that Minister brought the former CEO of AngloGold Ashanti and Vendanta, Mr Srinivisan Venkatakrishana, as an “unpaid advisor” who initiated the impractical and costly route of complete closure of SAA instead of recapitalisation.
He also alleges that Minister Gordhan engaged in procurement processes and disposing of state assets and made a case for the appointment of RMB as transaction advisor, a company in which he has disclosed that he owns shares. RMB was appointed through a deviation from normal procurement processes because of Mr Gordhan’s intervention.
Furthermore, Mr Gordhan engaged Mr Gidon Novick and Mr Venkatakrishana to engineer Mr Novick’s introduction to Harith and Takatso, as Takatso was not shortlisted as a strategic equity partner in the report developed by the DPE.
Sakhile Mokoena
13 December 2023
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