South Africa’s parliament said on Wednesday it had decided to refer to a special investigative unit the collapsed deal to sell a majority stake in South African Airways (SAA) to a consortium. The deal to sell a controlling stake in SAA to the Takatso Consortium was announced by the government in 2021 as part of efforts to end recurring bailouts of the flag carrier.
Public Enterprises Minister Pravin Gordhan said last week that the government and the consortium had agreed “there was no clear path forward” for the transaction after a new business and asset valuation. Parliament’s Portfolio Committee on Public Enterprises in a statement said the issue would be referred to the independent Special Investigating Unit (SIU), which investigates corruption at state entities, to ensure “accountability and transparency.”
“It is essential to address the sequence of events that led to the undervaluation and to investigate any potential corruption or misconduct in the process,” it said. The SIU has subpoena powers, can litigate on the state’s behalf and refers evidence suggesting criminal conduct to the country’s prosecutors.
The South African government has said SAA would revert to being fully state-owned and that a new way to raise money based on the airline’s assets would be explored with financial institutions. It ruled out giving SAA money in the months ahead. The embattled airline was on the verge of being liquidated before it entered a form of bankruptcy protection in 2019.
Its finances worsened during the COVID-19 pandemic thanks to restricted air travel and depleted its already minimal cashflow, forcing the government to hunt for a strategic equity partner to keep it afloat. Minister Gordhan reassured airline employees that their jobs were safe and that the company could sustain itself financially for the next year to 18 months.
Reuters
