The largest trade union in South Africa wrote to parliament this week to stop the “corrupt transaction” between Takatso Aviation and SAA.
National Union of Metalworkers of South Africa (Numsa) also warned President Cyril Ramaphosa that if the sale of the national carrier proceeded unchecked, the union would demand a commission of inquiry.
“We see this entire process as another form of state capture,” said the union general secretary Irvin Jim, adding that public enterprises minister Pravin Gordhan was the mastermind behind it.
“And sadly, parliament is folding its arms and doing nothing to stop this heist,” Jim said.
Jim was reacting to the Competition Commission’s recommendation that the Competition Tribunal approves the merger.
The deal, orchestrated by Gordhan, involves Takatso acquiring a 51% stake in the national carrier.
Jim said in a statement on Thursday that Numsa objected to the approval.
“We have been saying that the SAA deal Gordhan engineered stinks of corruption and we are disappointed that the Competition Commission decided to legitimise a process which was illegitimate to begin with.
“We are raising the alarm once again on this dodgy deal because there is no accountability from the department of public enterprises, and parliament is failing to protect this national asset,” he continued.
He said Gordhan was allowed to do as he pleased, including selling the airline to friends and former senior party officials.
Former Gauteng MEC of finance and deputy minister of finance Jabu Moleketi was involved in the transaction.
Moleketi also served on the ANC’s national executive committee and is currently a director of Harith General Partners, which owns a majority stake in Takatso.
Jim said SAA was established by parliament but Gordhan refused to disclose to the public or parliament how he chose Takatso. The public was simply expected to take Gordhan’s word that proper processes were followed, he said.
He said SAA was sold to a consortium based on its “potential” to raise capital, something unprecedented.
“You either have capital, or you don’t. The only conclusion we can come to is that this is a corrupt deal.”
He said SAA’s restructuring would result in at least 3000 job losses, while the benefits and conditions of those who stayed were eroded.
In contrast, he said, Takatso had not paid a cent to acquire the airline and had not sacrificed an ounce of blood for it. “If the sale goes ahead they are effectively gifted with a complete company for nothing.”
He said the public enterprises department had not demonstrated to the public what due process was followed for selecting Takatso above all contenders.
He said SAA had been worth R14-billion before its business rescue but Takatso later valued the company at R3-billion.
The fact that the department of public enterprises accepted the zero valuation of SAA by Takatso and gave the airline to them for free was troubling, Jim said.
He said SAA owned R1.3-billion in land in 2017 and had not disposed it. He said the land could not depreciate.
SAA should have had external, independent valuations conducted to get a true sense of the SOE’s value, he said.
He said Takatso deliberately undervalued SAA, and to fund the airline the company would likely sell SAA’s assets.
The SAA’s valuation report was “nonsense,” said Jim.
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