Public enterprises minister Pravin Gordhan insists his efforts to secure confidentiality in accounting to parliament regarding South African Airways’ (SAA) strategic equity partnership arrangement were about protecting the airline’s commercial interests and the integrity of the live transaction.
Last week Gordhan requested an in-camera meeting, away from the media and public, to brief parliament’s portfolio committee on public enterprises on the sale of SAA. Media attended with no expectation of being excluded but were asked to excuse themselves as Gordhan and the committee engaged in a standoff over their access to documents of the SAA sale.
This comes as the committee investigates allegations by former public enterprises director-general Kgathatso Tlhakudi to the speaker of parliament that Gordhan coordinated a “corrupt transaction” to secure a strategic equity partner for SAA.
The minister announced at a briefing on Wednesday afternoon that during an earlier meeting with the committee, parliamentary legal advisers told MPs that while “anomalies” and “governance lapses” were found in the transaction, they saw no evidence of corruption.
Parliamentary legal adviser Andile Tetyana also told the committee that a confidentiality regime would have to be considered in any meeting on the transaction as it remained live and its integrity needed to be protected, he said.
Briefing reporters in Cape Town on Wednesday evening, Gordhan said speculation had run wild “with little information”, wrong information and misinformed positions on the SAA transaction, which risked permeating the legislature and the committee.
“On the basis of advice from senior counsel, we have been very careful to say there is a history to this transaction that some have forgotten. It went through a phase after the Covid pandemic where a different set of economic climate conditions existed,” he said.
SAA competed with many airlines that fly in South Africa for passengers, he said, meaning commercial information about the national carrier’s transaction could be used by competitors to plan their routes or “keep SAA small and irrelevant”.
“All of that information about when it happens, how it happens, which planes will be acquired, cannot be disclosed at this stage as it would give competitors information where they will say, ‘We know how to outmatch these guys.’”
SAA’s business rescue is the process that brought the national carrier to this point, he said, adding these steps were taken through a formal cabinet process and not at the behest of “a chap named Pravin Gordhan”. Valuation is done on SAA and its assets, he said.
We’ve gone beyond the stage of just the word disposal. There are other types of public-private partnerships
— Pravin Gordhan, public enterprises minister
Gordhan also emphasised that the standing committee on public accounts appreciated that the transaction remained live and information remained sensitive until a fair valuation and renegotiation of the transaction was finished.
The government still aspired to grow the business of SAA, he said.
“We’ve gone beyond the stage of just the word disposal. There are other types of public-private partnerships. For example, some of the government buildings have entered into PPPs. If you look at Sanral, they use another variety which is build, operate and transfer.”
A framework on the disposal of state assets was in the works that considered a variety of joint ventures and other mechanisms to leverage assets in the context of limited fiscal resources and mobilisation of private capital, he said.
“You are going to see a lot more creative options come forward so we see a lot of projects coming on the ground. I think we must prepare ourselves for that … This is a dynamic environment we find ourselves in. It requires innovation, partnership with the private sector, and we also need to protect public interests.”
Documents may need to be updated as the transaction continues and is concluded, he said, reminding reporters that the parliamentary legal adviser found no evidence of corruption in the transaction and punctuated it by stressing: “There is no corruption in this process.”
In-camera meetings and the confidentiality regime he requested of the committee were common legal practices globally, he said.
Asked about Rand Merchant Bank’s involvement and withdrawal from the advisory process, Gordhan said this was a usual step in such processes.
His department has been as transparent and as accountable as possible under the prevailing circumstances, he said, adding that confidentiality ensures that once the deal is concluded, the department can inform the public accurately on the terms.
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