The Public Investment Corporation (PIC) on Monday confirmed that it owns a 30% stake in Harith General Partners, one of the partners in the Takatso Consortium that is set to acquire a 51% stake in South African Airways (SAA). However, the PIC stressed in a statement that it is not involved in the acquisition.
This follows concerns raised by the Democratic Alliance (DA) and aviation industry insiders about the possible involvement of Africa’s largest pension fund manager and ANC aligned individuals in the planned 51% sale of SAA.
“The PIC has noted media reports and comments by some public figures insinuating that PIC funds will be used for the acquisition of a 51% stake in the SAA … The PIC is not involved in this acquisition, nor are the assets that it manages on behalf of clients,” it said in a statement.
“However, the PIC owns 30% of Harith General Partners and some of the individuals involved in Takatso Consortium may previously have been associated with the PIC. Nonetheless, Harith General Partners and the Takatso Consortium did not involve the PIC in any way in this acquisition,” it added.
“Whilst it is a fact that the PIC has shares in Harith General Partners, it must be stated that the PIC is not a member of Takatso Consortium, which we understand is a special vehicle established by Harith General Partners and Global Airways,” the pension fund manager clarified.
DA MP and member of the Standing Committee on Public Accounts (Scopa) Alf Lees issued a statement on Friday saying there were a “plethora of concerns surrounding the deal”.
His comments came in the wake of Public Enterprises Minister Pravin Gordhan revealing earlier on Friday morning the Takatso Consortium as the new strategic equity partner for SAA.
“The consortium consists of Harith General partners, an African infrastructure and airports investor with strong links to the ANC and the PIC, and Global Airways,” Lees pointed out.
He said it was a “major concern” that the board of Harith General Partners is chaired by Jabu Moloketi, who also chaired the PIC and was deputy Finance Minister when Harith was granted R17 million in seed funding back in 2006.
“It is noteworthy that, whenever the ANC engages in public-private partnerships, it is almost always ANC bigwigs that benefit most,” added Lees.
Meanwhile, the DA raised other concerns.
“The DA is also deeply concerned by government’s confirmation that the consortium is still to undertake a normal due diligence exercise before the definitive sale and purchase agreement is completed,” Lees said.
“This is worrying in light of the fact that Minister Gordhan seems confident that the consortium will provide R3 billion in capital for the “revitalised” SAA. Clarity is needed as to what will happen should the consortium not go through with the purchase of the majority-shareholding in SAA,” he noted.
“Minister Gordhan has, after all, promised that the new SAA will be independent from the fiscus and thus taxpayers, so it is crucial that this promise be fulfilled lest even more taxpayer money is required for SAA in future.
“Government is still responsible for the historic liabilities of SAA and requires R14 billion in this regard, R10 billion of which will come from the Special Appropriations Bill currently in front of Parliament,” he explained.