Committee Report on allegation of irregularities in SAA sale

The Portfolio Committee on Public Enterprises convened in Parliament to deliberate and finalise its report on the petition of the former Director-General of the Department of Public Enterprises (DPE) on allegations of irregularity involved in the cancelled South African Airways-Takatso strategic equity partnership. The Chairperson highlighted the allegations the former Director-General (DG) brought forward against the Minister of Public Enterprises. These allegations included Rand Merchant Bank (RMB) being hand-picked by the Minister as the sole provider of transaction advisory services in the aviation sphere, Takatso Consortium not being included on the shortlist of potential strategic equity partners (SEP), the undervaluation of South African Airways (SAA), and the authenticity of the DG’s signature on the Molisane Memorandum. The Committee had been concerned about SAA’s financial viability after the cancellation of the SAA-Takatso deal. The Minister had indicated that SAA would be able to sustain itself for 12-18 months after the deal's cancellation. However, it had previously been indicated that the deal was important for SAA’s viability, and that programmes were meant to be rolled out once the deal had been finalised. The Committee also noted that the deal would be three years old in June, and were concerned about the impact of the delay on SAA. The Committee raised questions about the undervaluation of SAA, and said it was important for this to be further investigated. Members felt that understanding the process behind the undervaluation would shed valuable information on the dynamics behind the SAA-Takatso deal. The Committee was in agreement that the matter had to be referred to the Special Investigating Unit (SIU) for further investigation. The SIU was equipped to conduct a thorough investigation, especially regarding the alleged forged signature of the former DG. The SIU investigation would allow the Committee to properly understand the irregularities that may have occurred in connection with the deal. All Members were in support of referring the matter to the SIU. The Committee suggested that in future, Parliament should be a part of the decision-making process in terms of decisions such as the SAA-Takatso deal. The decision could not be left entirely to the Executive. This would ensure that due diligence was done and the necessary consultations took place. The Committee was of the view that SAA and the DPE should make a formal briefing to the Committee on the cancellation of the SAA-Takatso deal and the plan for SAA moving forward.