Tensions arising from behind-the-scenes mechanics of the deal by Harith Investment, trading as Takatso Consortium, to take over 51% of national carrier SAA have boiled over after Public Enterprises Minister (DPE) Pravin Gordhan’s latest attempt to muzzle Parliament and its constitutionally entrenched oversight role with an in-camera briefing and non-disclosure agreement (NDA) on documents from Takatso submitted as part of the acquisition process.
Correspondence between Gordhan and Khayalethu Magaxa, the chairperson of the parliamentary committee of public enterprises, through the Speaker of Parliament, and seen by “Business Report”, indicate that Gordhan has tried to strong-arm the committee into signing an NDA before accessing the documents.
However, the minister has subsequently submitted to the Speaker to ensure that the NDA is signed, while Magaxa maintained the committee would follow its mandate.
The documents at the centre of the furore, which Gordhan has subsequently submitted indirectly to the committee, include: the Rand Merchant Bank (RMB) appointment documents, RMB evaluation report (shortlist of parties), the Harith expression of interest, sale of shares agreement and addenda, the internal memo-evaluation process for the DPE as well as the draft of the NDA the minister intended for parliamentarians to sign.
Gordhan said he had sought legal opinion, which gave him the green light to share the documents subject to a conclusion of an NDA.
“I wish to place it on record that I requested Takatso Consortium to consent to share the documents on a confidential basis, but I have not received the consent. Furthermore, I have not received consent from the shortlisted parties to share the information,” the minister wrote.
On Tuesday, Gordhan, after months of postponing appearances before the committee on the matter, had written to Magaxa requesting “an in-camera meeting on the February 28th to take them through the confidential documents”.
But Magaxa, in a letter to Gordhan on Friday, said that he took issue with the minister claiming that the only information the DPE had not shared was the RMB evaluation report and the sale of share agreement as the minister’s office had neglected, or refused, to submit the shortlist of selected entities prior to the selection of Takatso Consortium.
He responded that the committee would not agree to attempts to unlawfully curtail its constitutionally entrenched oversight role.
“The committee’s acquiescence to an in-camera meeting with you should not be read as an exaltation of secrecy above accountability, particularly, where public funds are involved. While the committee is not averse to an in-camera meeting with you, it will not agree to a non-disclosure agreement whose terms are only known to you as this would amount to unjustified suspension of the Constitution,” Magaxa said.
Magaxa’s final word to Gordhan was to instruct that the committee “would like to have sight of all the documents in question on the above-mentioned terms no later than Wednesday 28th, failing which it would explore every available legal avenue to vindicate its constitutional rights”.
Attempts to get comment from Gordhan by the time of going to print were unsuccessful.
An authority on governance, who declined to be named, said it was unprecedented for a Cabinet minister to curtail the power of parliamentarians as they exercised oversight over the government departments.
“There is no precedent for this. Only security-related matters to do with intelligence or the army have the privilege of closed sessions. This is odd because the discussions are about a public asset funded by the taxpayer and parliamentarians report to the taxpayer. It is quite strange,” he said.
The wrangle comes on the heels of controversial attempts by the DPE, which has submitted a bill to Parliament, to repeal the South African Airways Act to facilitate the repositioning and restructuring of SAA by the government through the introduction of a strategic equity partner.
The motivation is that as the acquisition would entail that the government would become the minority shareholder in SAA, holding the remaining 49% stake, in terms of the sale and purchase agreement between the DPE and Takatso.
The repeal of the act is one of the condition precedents for the conclusion of the transaction in the light of the fact that the minister will no longer have full shareholder rights.
Critics of the repeal said the bill would not have been sent to the Parliament without the Cabinet ensuring answers on whether the Takatso Consortium was chosen lawfully to be the preferred strategic equity partner and was paying a fair price for the assets of SAA.
BUSINESS REPORT