Announcement of SAA’s interim board opens a can of worms

Controversy has erupted over the appointment of an interim board of directors for SAA by Public Enterprises Minister Pravin Gordhan.

The director-general of Public Enterprises, Kgathatso Tlhakudi, previously accused Gordhan and the department of approving an undervaluation of at least R15-billion for the sale of SAA to the Takatso Consortium without conducting an independent valuation.

Subsequently, on Monday, the department announced that Gordhan has appointed an interim board effective from April 15. The board will serve until the introduction of the strategic equity partner Takatso Consortium.

The new board members include:

  • Derek Hanekom
  • Dumisani Sangweni
  • Fatima Ghani
  • Mahlubi Mazwai
  • Fundi Sithebe
  • Wrenelle Stander

Among the parties that criticised the appointment of the new board is African Transformation Movement (ATM), which said the appointments were made without stakeholder consultation.

The ATM further said the appointments are part of an attempt to push through an irregular and potentially illegal transaction without accountability.

ATM spokesperson Zama Ntshona said on Tuesday: “[Today] we learnt of the news that [Gordhan] has decided to reconfigure the board of the South Africa Airways, in a clear attempt to not only silence criticism within the board, but to work with a board that will rubber-stamp a clearly tainted transaction.

“What is further disturbing about the announcement of the new board is that no stakeholder was consulted on the matter, further deepening suspicion that this was done not for the reasons advanced by the department, but to help and enable the minister to see through an irregular and potentially illegal transaction without or very little accountability.”

Ntshona said the ATM condemns Gordhan’s unilateral act and calls for all former SAA board members to come forward and shed light on any irregularities.

He added that his party plans to call on the portfolio committee on public enterprises to summon the former board and the minister to account for their actions.

“This unilateral act by minister Pravin Gordhan cannot be supported and should be condemned by all South Africans who wish to live in a corruption-free society, where politicians do not abuse their powers to escape accountability.

“The African Transformation Movement joins the call made Numsa [National Union of Metalworkers of SA] that all former SAA board members should come forward and shed light on all that has been happening at SAA leading up to this moment.”

Takatso Consortium, the largest equity partner in SAA, is yet to fulfill its promise to invest R3-billion in the national carrier over three years, according to DA MP Ghaleb Cachalia.

Cachalia is arguing that the frequent changing of board appointments does not address this issue, which was the reason for the state ceding a majority stake in SAA to Takatso in the first place.

He said Takatso’s failure to fulfill its responsibilities as the largest equity partner in SAA raises questions about whether it wants the taxpayer to continue funding SAA’s recapitalisation costs.

“While Mr [Derek] Hanekom, a former minister of tourism, has been characterised by [Gordhan] as having a deep understanding of the aviation industry’s crucial role in promoting travel and economic growth, he knows next to nothing about the aviation industry and his appointment [to lead the new interim board] is yet another example of the ANC’s cadre deployment,” said Cachalia.

“One would have expected Gordhan to consider appointing someone with aviation expertise to oversee SAA’s transition period and the implementation of the public/private partnership with the Takatso consortium.

“SAA is playing in an increasingly competitive environment and the longer it takes to get the Takatso deal going, while busy changing the deck chairs, will increase the chances of failure and more bailouts from a fiscus that is already stretched to the limit.”

Numsa has also criticised the government for allowing Gordhan to act without accountability and “run state-owned entities as he pleases without following the law”.

“As things stand, SAA has been totally undervalued for the sake of enabling this corruption,” said Numsa general secretary Irvin Jim.

“The last SAA audited report ending March 2017 says that SAA’s total assets were valued at R14 594-billion.

“The government has paid off all the debts of SAA, but it is apparently valued at R3-billion. What happened to all of SAA’s assets? Either these assets were disposed of by the business rescue practitioner or by [Gordhan] himself.

“What is disturbing is that we are told that the Takatso Consortium appointed its own valuator who valued the assets of the airline at R3-billion.

“It is highly irregular that an entity like Takatso, an outsider, which is undergoing a process to be an equity partner at SAA, has a valuation which is so much lower than what SAA was valued as of 2017 audited financial statements.

“Is this why SAA is being sold for R51 as reported by media reports? Are we really dealing with a rogue minister who sold a state entity to his friends, so they can loot the airline for their selfish benefit? These are some of the questions we are asking.”

Numsa shared the sentiments expressed by the ATM and said the union is calling on former SAA board members to disclose any corrupt activities, including the people allegedly appointed in secret.

It also called on the ANC to explain Gordhan’s actions and whether they represent the decisions of the governing party.

“We demand that the ANC must come clean and explain to the public about the conduct of their deployee and explain to us whether minister Gordhan’s actions represent the decisions of the governing party.”

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