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Why the UDM is taking Gordhan to court over SAA deal

Demands details – and wants to know why government would spend millions on a commission of inquiry, then reward some of those implicated in the findings with running the airline.
The DA has also raised objections to the proposed deal. Image: Rogan Ward/Reuters

On Tuesday, the United Democratic Movement (UDM) instructed its legal representatives to send lawyers’ letters to two cabinet ministers and the Public Investment Corporation (PIC) regarding the proposed deal to allow the Takatso Consortium to acquire a 51% stake in South African Airways (SAA).

Speaking to Moneyweb on Tuesday, UDM leader General Bantu Holomisa said the UDM had just formally instructed its lawyers to write to Finance Minister Tito Mboweni, Public Enterprises Minister Pravin Gordhan and the PIC demanding to see the proposed shareholder agreement, valuation report, partnership agreement and management agreement for the proposed deal.

“We have also asked the PIC and the minister of finance how the proposed agreement tallies with the implementation of the findings of the Mpati Commission of Inquiry into the affairs of the PIC.

“We are particularly interested in how Harith [General] Partners gets fingered in the Mpati Report and then resurfaces as a potential stakeholder in SAA,” said Holomisa.

“We would like to know, from minister Gordhan in particular, why government would spend millions of rands on a commission and then reward some of those implicated in the findings with running SAA,” said Holomisa.

Earlier, the UDM said in a statement that the entire SAA deal is nebulous, and that it is unclear how government prioritised Harith as a partner after the negative things the Mpati Commission had to say about it.

The UDM has therefore decided to challenge Gordhan’s decision in court.

DA has ‘grave reservations’

The Democratic Alliance (DA) has also raised its objections to the proposed deal. According to DA MP Alf Lees, while Gordhan announced the deal with great fanfare 11 days ago, he failed to provide any real substance of what it would entail.

“There are a host of unanswered questions that must be dealt with in order to ensure that the proposed deal is not just another form of SAA bailout disguised as a deal via the PIC, or other development finance institutions, or yet another enrichment exercise for connected ANC cadres,” Lees maintained.

“Whilst the DA welcomed the fact that on the surface the state is finally apparently giving up control over SAA, we have grave reservations given the lack of transparency regarding the details of the process followed to identify a beneficiary for the 51% shareholding as well as the details of the memorandum of understanding or agreement negotiated but apparently not yet entered into with Takatso,” he added.

Constitutional obligation

The DA believes that in the interest of the constitutionally enshrined obligation for transparent governance and in terms of the rules of parliament that require that members of parliament be provided with information requested from the executive, Gordhan and Mboweni must provide all South Africans with full, detailed and unequivocal answers to a list of questions as well as to provide the full details of the information requested.

But Lees has reservations on whether this will be done.

“Unfortunately, experience has taught us that both ministers Gordhan and Mboweni have, on occasion, failed to give detailed or clear replies to requests for information.

“This is particularly true of minister Gordhan who after some 12 weeks has still not provided Parliament’s Standing Committee on Public Accounts [Scopa] with information on SAA that was requested during a Scopa meeting on 25 March 2021 and in writing on the same day immediately after the meeting.

“The DA has also written to President Cyril Ramaphosa and the Speaker of Parliament, Thandi Modise, to appeal that they use all the authority vested in them to guarantee that ministers Gordhan and Mboweni swiftly provide the information requested and to bring all South Africans into their confidence,” Lees said.

Listen to Ryk van Niekerk’s interview with SAA CEO-designate Gidon Novick (or read the transcript here):

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“Demands details – and wants to know why government would spend millions on a commission of inquiry, then reward some of those implicated in the findings with running the airline.”

Well it’s quite simple – free money from the taxpayer is just too hard to resist.

“a deal via the PIC…or other development finance institutions”

I think that’s pretty certain, “development finance institutions” is the pool Harith paddles in, Takatso couldn’t be so confident of raising R3bn otherwise : Harith’s own balance sheet couldn’t support anything like that amount.

So the big question is, what is the nature of the R3bn and what are the T&Cs, which need to be in the public domain.

Nice response UDM and DA. At least Gordhan downsized this loss making enterprise.

From a position of ignorance, I guess it would be easier to follow a process if there really was anyone else interested in taking on SAA.

Seems like they opted to pass the lemon to the PIC and its (captive) investors?

The PIC is the most correct place to go to.
Government pension money for Government employees to work with.

On a lighter note, call it a Closed Corporation CC

Yet another scam in the making.
Note absence of transparency and details of “the deal”. This is the first sign of yet another “arms deal”.
By now we should all know that the Corrupt ANC cannot be trusted with a 10c bag of sweets, let alone a billion rand transaction.
First we must identify which cadres, which family members, whose girlfriends, etc., are involved in the scam.

Another corrupt ANC looting merry- go- round for ANC cadres and friends with tax money. What is a few billion between ANC friends.

My dear UDM — Very well done !!
Please give the judge a complimentary set of orange overalls for Gdan to wear on his way out !!!!

I am starting to smell a rat here. A prediction, the Taxpayer funding will not stop, might be delayed but will probably start when things go hairy again.

EXACTLY my “premonition” – perhaps starting far sooner than anyone thought with the Zim ticket refund money that SAA apparently isn’t able (yet) to get from the Zim Treasury…..

Maybe they should also ask why the guvment wasted sooo many billions of Rand over the last 15 years baling out this cash cow for the corrupt ANC?

Well done UDM.
By stopping this deal and sinking SAA you will make up for your disastrous coalition decisions in Nelson Mandela Bay where your votes gave power back to corrupt thieves.

Holomisa was the FIRST to be kicked out of the ANC when Mandela was still president because he exposed ANC corruption – did you know that? He exposed former minister Stella Siccau so the ANC very quickly fired Holomisa from the party – read the history….

The bigger question is … So what? We just ignore you. What are you snowflakes gonna do about it anyway? Rattle your teacups in your saucers more noisily??

The ONLY reason we have a government that can act with such blatant and willful impunity is ENTIRELY down to an opposition that CAN be just IGNORED.

And in turn, that the opposition ALLOWS themselves to be treated with such disdain is ENTIRELY due to THEMSELVES.

The day the opposition actively RESOLVE to stop casting themselves as the VICTIMS of apathetic voter support, is the moment they will turn the situation around.

Speak to any of the leading lights in ANY of the opposition parties, and ask them why they PERENNIALLY fail to get traction amongst the electorate, and EVENTUALLY (and very reluctantly!) the “confidential” answer comes out (and its the SAME for ALL of them!) – the leaders INVARIABLY fall back to point to blaming the electorate for “not appreciating” the sheer wisdom and unparalleled magnificence their “wonderful party policies” offer. (And equally invariably, it’s just their party – alone – amongst all the others – that has the magic sauce for saving SA).

There is NEVER an admission by the hierarchy that these policies, OR the leadership, OR the SERIOUS LACK of activism by the party themselves – could have ANYTHING to do with this rotten state of affairs.

It’s the Electorate, Stupid! Repeated without refrain!

I have long held the opinion that the centre of power and influence for Opposition Parties does NOT reside in Parliament. Instead (and for each party this will be different) their power resides ONLY in the highest MAJORITY electoral position that they hold.

For example, the DA holds the premiership of the Western Cape. Ergo, THAT is where the leadership and de facto power REALLY stems from. And and whose leadership has the right to determine the party direction.

Exercising the DA leadership from entitled, self-absorbed snowflakes in Parliament is just plain wrong-headed, and is putting the cart before the horse.

John Steenhuizen is a very able personality, and so the right person to be the DA parliamentary office leader. But actually lead the DA from Parliament? Nope! They HAVE to be – my opinion – the JUNIOR partners in the leadership hierarchy.

The party policies need to be written SOLELY by – and driven from – the REAL powerbase of the party. And definitely not from self-important snowflakes sitting in cushy R1M+ seats in the parliamentary gray-train, and pretending shuffling bundles of papers and talking a lot, justifies their existence.

The sooner the party recognizes Parliament is – certainly from an opposition party’s point of view – NOT where an opposition centre of gravity lies, the better.

Jonnox; from a strategy point of view you might have a valid point. However, in terms of the Constitution there’s no other way available than parliament and portfolio committees like Scopa for information about deals like SAA to be shared with the SA public, and for politicians to be held accountable to the People! This is the basis of a democracy since the days of Plato and Socrates.

The fact that Gordhan hasn’t answered certain questions about the SAA deal at Scopa for a whopping THREE MONTHS, shows clearly the extent of how he and Mboweni are covering up, probably specifically to hide certain truths from the taxpayer….

Thanks for your response, Louise!

On paper – and it is on paper ONLY – we have a wonderful democracy and constitution. Something Plato, Socrates, (and the naive), would be very proud of.

However, in practice … the system is clearly NOT working.

It’s quite obvious that the system is being deliberately gamed by the existing governing party to their own electoral benefit.

It’s also equally obvious that the opposition parties themselves are BUYING into this behaviour.

For example – considering the past behaviour from previous office-bearers, it’s ludicrous that it should even be contemplated that the “Speaker of the House” should be drawn from the governing party!

When I suggested to one of the Chief Whips that electing a key official of this magnitude from the governing party for a crucially neutral position like this, was a constitutionally silly (and dangerous!) idea. And that the obvious solution was for such officials to instead come from an external neutral position (a retired judge maybe), or solely from the ranks of the opposition parties, the remark was … “That’s a novel idea, I hadn’t thought of it like that before!” There was no further action.

And then these same people want to get their knickers in a knot, and wonder why the cookie always seems to crumble in the governing party’s favour when push comes to shove!

Is it naïve to expect otherwise? Or is this criminally stupid??

I’m NOT suggesting that Opposition parties must abandon a presence in Parliament.

Their NEEDS to be a presence there, because – as you rightly say – THAT is the place where the government of the day is called to account.

My point remains though … Parliament is NOT the place where the party leadership HAS to be.

Having a skillful team in Parliament to ask necessary questions of government is a VERY DIFFERENT matter from ceding the political gravitas of the party from the REAL leaders in the lower mayorships and Province, to a bunch of entitled, bench-warming snowflakes in Parliament.

What happens then is that you are taking the essential policy- and direction-making POWER of the party from the REAL movers-and-shakers, and handing it to a bunch of entitled snowflakes in Parliament who (VERY mistakenly!) think it is THEY who are the saving grace of the party.

Steenhuizen is very proud of his “policies” – all prepared by his “Shadow Ministers”. But they are not worth the paper they are written on!

Dull…! Boring…! Supremely unimaginative…! They need a COMPLETE workover.

Shortly before the last General Election, and I personally told Steenhuizen the party had a major problem with the lack of charisma and excitement in its electoral messaging.

He would hear none of this.

The poor election results came as a huge surprise to the DA. They rightly fired the boss.

But they also kept the intrinsic problem that has dogged them for DECADES!

Jonnox, thanks for your explaination, and yes I’m I couldn’t agree more! Especially regarding the Speaker of Parliament – the last Speaker who was vaguely professional was Max Sisulu – and then followed a lady who vehemently defended the Nkandla kraal, saying the livestock was “holy!”

A thing that really gets to me about the portfolio committees is that half the MPs often don’t ask the right questions. But yes, parliament being accountable to the People is in theory only otherwise one wouldn’t find half these ministers sending their DGs to portfolio commitee meetings all the time

Unanswered Question – media, please help!!!!!

Part of SAAs obligations in terms of the BRP process is refunding ticket holders who couldn’t fly when SAA grounded to a halt. Money is provided for that with the recent Special Appropriation Bill passed in parliament BUT there’s apparently a hiccup with money that the Zim government must pay to SAA for people who bought tickets in Zimbabwe; the Zim Treasury says it’s not paying SAA because the country lacks enough foreign exchange (or something to that effect.)

So that obviously leaves a gap in SAAs kitty to meet part of its obligations – whatever the value of the Zim money is, which is not known.

Questions; 1. Is SAA still solvent as stated by the BRPs if this portion of its income doesn’t arrive from Zim?

2. Where will SAA get the money to refund Zim ticket holders? (It’s probably not a huge amount but nevertheless.)

This is a riddle, most puzzling to me….

They should not be refunded from my tax money.
They were very stupid to buy the tickets from a bankrupt saa in the first place.

Excellent move by DA and UDM; indeed, the Mpati Commission recommended that the complex structure of Harith be probed because, according to the Commission (chaired by none other than the brilliant Gill Marcus), it’s typical of companies with such extremely intricate and complex structures to use that complexity to disguise the true nature of transactions. In other words, complete lack of transparency!

That probe into Harith as recommended has YET to happen! But Gordhan couldn’t care…..

Of course it’s another govt bailout. Nobody with half a brain would touch SAA

End of comments.

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