Question NW795 to the Minister of Public Enterprises
29 April 2024 - NW795
Ismail, Ms H to ask the Minister of Public Enterprises
(1) How did a certain person (name furnished) get to be part of the Takatso deal when he is a lead shareholder in Lift, a direct competitor; (2) (a)(i) how and (ii) why did he approve the deal and (b) on what merit did he agree on R51; (3) whether he, on the benefit of hindsight, has found that he did not act in the best interest of the Republic as this is a major conflict of interest and seriously undermines the findings of the State Capture Report; if not, what is the position in this regard; if so, what was learned from there?
Reply:
The Department of Public Enterprises and Ministry have always acted in the best interests of the State. Many detractors and liars have attempted to cast doubts on the integrity of this process, but without any unassailable facts. The fact that the transaction did not proceed, is testimony to the fact that based on new valuations of the business and assets of SAA, if fair value was not attainable, then the transaction must be terminated.
There has been no “conflict of interest” or anything contrary to the findings of the Zondo Commission. It is precisely because the recommendations of the energetic implementation that vested interests and certain nefarious elements that this transaction and DPE have come under relentless negativity.
- The initial Strategic Equity Partner (SEP) selection process required the parties to meet the following criteria:
- Strategic fit;
- Funding capacity;
- Operational experience in the private sector and track record;
- National interest; and,
- Executability.
The initial selection process did not yield the desired outcome as none of the interested parties met the above criteria. Towards the end of February 2021 the Department received further Expressions of Interest.
Four (4) parties were shortlisted and were subjected to a evaluation process and scoring. From the scoring, two proposed SEPs were shortlisted, namely Harith General Partners and Global Aviation which had partnered with Lift. They proceeded to the due diligence stage and concluded a Memorandum of Understanding (MOU) as a Consortium after both parties presented their intention to bid as a Consortium, Takatso Consortium.
The Department was satisfied with Takatso Consortium’s proposal since it met the Department’s requirements. Takatso had the requisite combination of financial and operational capabilities required for the successful relaunch of SAA.
(2)(a)(i) The deal was approved Cabinet.
(ii) Cabinet approved the deal since Takatso Consortium met Government’s selection criteria (financial and operational capabilities) and that the deal was in the best interest of SAA and Government as it would contribute to SAA’s financial and operational suitability.
(b) The consideration for sale of shares in SAA to Takatso was R3,000,000,051.00 (three billion and fifty one Rands).
(3) The SAA SEP transaction was approved by Cabinet having seen that the deal was in the best interest of the Republic. The deal would guarantee SAA’s future’s sustainability as government would not be expected to inject capital into SAA for operations.
It must be emphasised, once again, that notwithstanding the damage done to SAA by corruption in years prior to 2019, and COVID, induced shut down of borders across the globe and in South Africa, the revival of SAA and the search for a strategic equity partner has been undertaken in the national interest and with the approval of Cabinet.
Remarks: Approved /Not Approved/Comments
Melanchton Makobe P J Gordhan, MP
Acting Director-General Minister
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