The termination of Takatso Consortium’s 51% takeover of the South African Airways (SAA) would not exonerate the transaction documents from regulatory, governance, civil and criminal scrutiny, officials and aviation industry insiders said on Wednesday evening.
The controversial deal has been under the spotlight due to allegations of corruption.
This is as the double whammy of Public Enterprises Minister Pravin Gordhan's imminent retirement and the striking down of the controversial deal, confirms Cabinet was the escape route for a deal that was tailor-made to baffle the taxpayers.
Gordhan who this week indicated that he was retiring from politics after the elections, yesterday announced that the deal had been called off.
"As a result of various factors, we have come to the point where those negotiations will no longer continue. Our search for the right partner for SAA will not happen through this process," Gordhan said, adding that the Cabinet was updated on the matter yesterday morning.
The deal, signed in February 2022, was subject to renegotiation of the terms of the transaction.
Last night Khaya Magaxa, the chairperson of the Portfolio Committee on Public Enterprises, told Business Report: "We appreciate and are thankful to Cabinet for the termination of the deal, but we are not going to put our hands in our pockets.
“The committee still have to finalise our investigations and report to the Speaker on the allegations brought by the former DG (Former Director General in the Department of Public Enterprises Kgathatso Tlhakudi) on matters to do with impropriety and corruption in the transaction."
Magaxa said the committee understood that it did not have the capacity to investigate the matter forensically and would leave that to others, but it still had an obligation to unpack Tlhakudi's submissions before it.
Tlhakudi’s dismissal in June 2023, executed by Justice and Correctional Services Minister Ronald Lamola, followed clashes on procedural fault lines in the deal.
Thlakudi has also made presentations to the Competition authorities, who which had ultimately approved it with conditions.
Magaxa, in response to a Business Report query regarding whether the Committee had access to all the appropriate documents from Thlakudi, despite the non-disclosure agreement (NDA) proviso imposed by Gordhan on Thlakudi (with the threat of legal action for disclosure), confirmed the receipt, but not the authenticity.
"Our investigations are to get to the bottom of the allegations and processes of the deal, we do not have forensic capacity," Magaxa said.
Thlakudi has denied knowledge of an attachment cited as the Molisane Memorandum, which allegedly bore his signature, which he claims is fabricated.
It was a proposal made by Harith and Global, which later became the Takatso Consortium, to the Department of Pubic Enterprises (DPE), which satisfied the DPE’s requirements.
Last night, Tlhakudi told Business Report that he hoped all the appropriate entities would scrupulously fulfil their mandate in their investigations.
Thousands of people lost their families' livelihoods when they lost jobs through SAA's restructuring, he said.
“There are reports dating from back then that show a different pathway from the one that has been followed" Thlakudi said, insisting he no longer had a dog in the fight.
"This (deal collapse) does not change anything for me. I lost my job," he said.
Aviation insiders insisted Gordhan already knew last week about the Takatso withdrawal, but had been hindered by the dilemma of how the issue would be presented to the public.
Takatso said in a statement yesterday that it had concluded that the revised transaction terms were no longer in the best interest of its stakeholders.
“The terms of the proposed revised transaction are simply not workable for Takatso and we could not under the circumstances allow this process to continue to drag on.”
It also confirmed that it had written to the department last Friday, signalling its intention to trigger the termination by mutual consent.
“Takatso can confirm that the department has since reverted to it, consenting to that termination.
“The parties have thus agreed to terminate the Share Purchase Agreement, previously announced on 22 February 2022 in terms of which Takatso was to acquire a 51% interest in SAA. Consequently, all work and negotiations on the proposed transaction have ceased,” Takatso said.
Aviation sources said last night that the latest development left SAA in limbo as it had now been cut off from government bailouts with the last R1 billion being pocket change to ease its debt burden.
Industry insiders also said Takatso's withdrawal, though the proposed strategic partner had never showed coin, took SAA back to the drawing board while the competition clamoured for its routes and licences.
In an exclusive report in Business Report, titled Takatso deal goes begging after Gordhan bows out broke the news on Monday.
It reported that government aviation sources had said that the Takatso Consortium majority stake acquisition of SAA was effectively dead in the water as it could not get guarantees from the government to keep the airline afloat.
The spotlight is now firmly on Gordhan and his actions after wasting billions of rands in taxpayers money, and for his lack of transparency around the deal.
In an earlier exclusive, Business Report broke the news last month, Takatso deal: Gordhan, Parliament in tense stand-off as minister tries to muzzle it, which created a public scandal.
Correspondence showed the Minister had tried to strong-arm the Parliamentary Committee of Public Enterprises with an in-camera briefing and NDA on documents from Takatso submitted as part of the acquisition process, which violated its constitutionally entrenched oversight role.
At the time Gordhan said he had sought legal opinion which gave him the green light to share the documents subject to the conclusion of an NDA.
Magaxa had said that the committee would not agree to attempts to unlawfully curtail its constitutionally entrenched oversight role.
BUSINESS REPORT