Parliament wants Gordhan to appear over suspended DG's cronyism allegations about SAA deal

ANC MPs appear reluctant to immediately agree to calls from opposition parties to hold an inquiry into the sale of SAA. 

Instead, they want public enterprises minister Pravin Gordhan to appear before the public enterprises portfolio committee to respond to allegations made by suspended director-general Kgathatso Tlhakudi before any such decision is made. 

Tlhakudi, who was suspended in June last year, made a protected disclosure complaint to National Assembly speaker Nosiviwe Mapisa-Nqakula. Tlhakudi accused Gordhan of corruption and claimed he was being punished for refusing to implement illegal and irregular instructions in relation to the sale of SAA. 

The government announced a partnership with the Takatso Consortium almost two years ago, a deal that will see the private entity acquire 51% of the government’s shareholding in SAA. But the transaction has been shrouded in secrecy. 

In his complaint to Mapisa-Nqakula, Tlhakudi said the misconduct charges against him were a witch hunt because he had expressed concerns about the SAA deal. He asked parliament to intervene and investigate the issues he was raising.  

Tlhakudi charged that the SAA transaction was not only ill-conceived, but it was seen as an opportunity to benefit a few privileged individuals favoured by Gordhan in an irregular manner. 

Tlhakudi alleged his problems started in December 2019 when, despite being an acting director-general of the department, he was excluded from a meeting where the SAA board took the decision to place the airline in business rescue, a meeting which Gordhan attended. His subordinate was instead in attendance, he said.  

“On reflection and in hindsight, this pattern of undermining my role as the DG and accounting officer of the department using my subordinates, was set from this point onwards. 

“I guess my ‘mistake’ had been to question the directors of SAA that I had found at SAA offices on the day, on the board’s recommendation to place (SAA) in business rescue, when the path to the recapitalisation of the airline and its restructuring had been set out.” 

He said the funding required for the financial year was R1.6bn and he believed the savings could be realised within the budget without having to seeking assistance from SAA bankers, which had already expressed reluctance to fund SAA even with a government guarantee unless it was placed in business rescue. 

During the negotiations on the Takatso deal, Tlhakudi claims that he was removed as the department of public enterprises’ lead on SAA and could no longer lead the transaction discussions and a team that was reporting directly to Gordhan was brought in. 

Tlhakudi had also raised concerns specifically about the valuation of SAA assets, the purchase price, and the distribution of the transaction risk. 

 

“I had raised these concerns in a meeting and in writing to the DPE negotiating team.” He said he also raised the perceptions that the deal would receive in the public arena.

He claimed Gordhan had tried to silence him when he raised his concerns, but he had stood his ground as he believed his position was correct.  

Tlhakudi claimed he had done this to ensure a regular and lawful disposal of SAA. 

The choice of Takatso was irregular and no process as required by the constitution, Public Finance Management Act and other prescripts had been followed and he had been wary of this choice from the beginning, he said. 

“The valuation of SAA at R51 and the deal structure was problematic as it seems to devalue SAA, in which government had committed about R30bn to extinguish guaranteed liabilities and to restructure the airline through business rescue.”

In a written reply to parliament, Gordhan denied Tlhakudi’s allegations. 

“I wish to record that the allegations that TIhakudi has made concerning the selection process of the strategic equity partner in SAA are unfounded. In fact, any allegations of impropriety concerning SAA, its restructuring and the business rescue process are entirely without merit,” he said. 

“More importantly it bears emphasis that Mr TIhakudi's suspension and disciplinary action are entirely unrelated to the SAA matter.”

Gordhan said the catalyst for the disciplinary action against Tlhakudi was a complaint received by the Public Service Commission (PSC) concerning alleged unethical conduct regarding a recruitment process for the position of director: security and facilities. 

The complaint was that TIhakudi did not want the successful candidate appointed.

“Following the investigation Mr TIhakudi now faces a disciplinary process to test these allegations. This is the real issue being tested by the disciplinary process and all other matters raised by Tlhakudi appear to be intended to create atmosphere and detract from the real issues,” said Gordhan. 

He denied that he had sidelined Tlhakudi and acted irregularly in the SAA business rescue process or that he had engaged in cronyism. 

“This is not true. Mr Tlhakudi was central to this process. In fact, Mr Tlhakudi was the project lead concerning the SAA business rescue in his capacity as director-general. The decision to place SAA in business rescue was taken by the board.” 

The EFF’s Omphile Maotwe was the first to call for an inquiry into the sale of SAA, alleged undervaluation of assets and other allegations made by Tlhakudi. 

“These are very serious allegations and they can’t just be left,” she said. 

Maotwe’s call for an inquiry was supported by DA MP Ghaleb Cachalia, who said with a complaint and a written response from Gordhan, the committee had to get on with the job of seeking the truth. 

He noted that the committee had previously accepted Gordhan’s reasoning for non-disclosure of the details of the SAA deal. Tlhakudi’s allegations provided an opportunity to test and interrogate aspects of disclosure and non-disclosure.

But ANC MP Nkosinathi Dlamini questioned Tlhakudi’s motives. He also charged the suspended director-general had not provided evidence for his allegations. 

“The complainant in this matter has been presenting to this committee on matters of SAA, not once, not twice and some of the issues that he is raising now are the issues that the committee has been raising in terms of the sale of SAA and he provided responses which are contrary to what he is saying now. 

Dlamini added that: “The integrity of the DG is highly compromised.” 

Another ANC MP Khaya Magaxa, who chairs the committee,   said the committee would have to call in both Gordhan and Tlhakudi before it could determine its next move. 

The committee agreed. 

TimesLIVE

Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.