A South African Airways aircraft on the apron of Frankfurt Airport in 2018, when it still could fly.
Silas Stein/picture alliance via Getty Images
- Public Enterprises Minister Pravin Gordhan said the deal between South African Airways and Takatso remained “alive”.
- He dismissed the resignation of a key stakeholder from the consortium’s board as “argy bargy of such a transaction”.
- Gordhan did not want to share more details about the deal, saying that it was at a sensitive stage.
- For more financial stories, go to the News24 Business front page.
Public Enterprises Minister Pravin Gordhan said the South African Airways (SAA) deal with government’s chosen partner, the Takatso consortium, “remained alive” and dismissed a major schism in the consortium as “argy-bargy”.
On Monday, Gidon Novick resigned from the consortium’s board, citing concerns about its ability to raise the money needed for the deal. The former co-CEO of kulula.com and co-founder of LIFT, also represented Global Airways, an aviation leasing company which owns LIFT. They are the minority shareholders in Takatso, and were supposed to contribute aviation expertise to a “new” SAA.
The investment fund Harith is the majority partner in the consortium and was responsible for raising money for the deal. Takatso is supposed to take a 51% stake in SAA. In return, they would invest R3 billion in the airline over two years.
For its part, Harith said Novick’s resignation was “appropriate” given the potential conflicts of interest between LIFT and SAA.
On Tuesday, Gordhan told Parliament’s Standing Committee on Public Accounts that it was intriguing that Novick resigned from the Takatso board, but did not resign as a partner, likening such an act to “having your cake and eating it”. Global Airways and Novick are retaining their stakes in Takatso.
“Mr Novick was a small and relatively minor party in a transaction. Just because he happens to be somebody with experience somewhere in his past, as all of us do, doesn’t discredit everybody else, nor does it mean that what he puts on the table is something that one must take seriously,” Gordhan said.
Gordhan that despite concerns the deal was still moving along.
“Issues have emerged in the public domain over the last 24 hours, but that is an internal matter as far as the consortium is concerned and is part of the argy-bargy of such a transaction. The transaction remains both alive and live,” said Gordhan.
Gordhan and multiple members of the delegation, which included the Department of Public Enterprises and SAA, told Scopa that the Takatso deal was in a “sensitive” stage, which prevented them from sharing the finer details.
Scopa member and DA MP Alf Lees insisted on the committee getting a full report of SAA’s financials, saying that Scopa and the South African public must know what SAA’s financial position and the process of the transaction was.
“This cannot be a closed process. Who is the department talking to at Takatso if the CEO does not know the details? This is a parliamentary committee that is owned by the South African public. To say that performance is better than budget is really treating us with disdain,” said Lees.
In response to a question from Lees on how SAA hoped to fund the transaction if Takatso did not have the funding, Gordhan said the department had been given an assurance that the deal would not fall through over a lack of funding.
SAA CEO and interim chair John Lamola said on 3 November, the Special Investigating Unit was making progress in investigating 23 contracts at SAA relating to general procurement and aircraft leases dating back to 2015-16.
“Matters being investigated were indicated without providing detailed information into what they are investigating that all of them are sensitive and withheld so as not to impugn on the reputations of companies under investigation,” said Lamola.