Gordhan and Ramaphosa’s Cabinet must be held accountable for the ‘dud’ SAA/Takatso deal

Issued by Mimmy Gondwe MP and Alf Lees MP –
13 Mar 2024 in News

The announcement by the Minister of Public Enterprises, Pravin Gordhan, that the ‘dud’ SAA/Takatso deal has been cancelled was inevitable given that it was a bad deal from the beginning. Gordhan’s stubborn insistence on keeping details of the deal secret and the Takatso Consortium’s insistence for more taxpayer funds before the deal could be consummated, were clear red flags.

Gordhan, together with President Cyril Ramaphosa’s Cabinet – who collectively approved the deal, must now be held accountable for failing to exercise due diligence before entering into sale negotiations with Takatso. They all failed in their fiduciary duties as custodians of a state asset and should bear responsibility for any losses that taxpayers may have incurred during the period when the deal was supposedly in force.

The taxpayer took on all SAA’s massive liabilities of some R15 billion leaving SAA debt free with considerable assets including a respected brand all of which had a likely value that exceeded R7 billion. For 51% of this debt free SAA to be sold for R51 was outrageous and a slap in the face of taxpayers.

The DA will be demanding that Gordhan tables the contract termination documents that he entered into with Takatso to terminate the deal. After spending years refusing to release the purchase agreement, South Africans at least deserve to know the reasons behind the termination of the dud SAA/Takatso deal.

Today’s announcement is an epitaph to what has been a disastrous tenure for Gordhan as the Minister of Public Enterprises. His announcement that he will be resigning at the end of the current administration is a little too late as he has left a trail of destruction in his wake. SAA will once again become a burden on the South African taxpayer because he failed to exercise due diligence in finding a viable partner for the airline.

SAA is now a clear example of how the ANC government has mishandled SOEs and drove most of them to the brink of bankruptcy. There is no strategic need for a state run airline that diverts limited State funding away from the desperate need to stimulate economic growth. SAA must be cut loose and be sold.