Wiri Gumbi from the Competition Commission says they are concerned about job security at South African Airways (SAA).
Takatso Consortium has said although the merger is unlikely to lead to retrenchments, it cannot guarantee that it might not become necessary in the future, should operational requirements or the aviation industry change.
Takatso does say that its aim is to ensure that SAA remains a viable business going forward.
The commission, however, says it has been brought to its attention that employees are concerned about jobs being lost when this transaction goes through.
Gumbi was presenting evidence before the Competition Tribunal Commissioners in Pretoria.
“It has been indicated by many of the unions that they are worried about employment, of course, that stems from the business rescue process which SAA undertook, which resulted in several thousand staff being laid off. That business rescue process is separate from the major process and our preoccupation is to understand whether or not the merger will result in any employment consequences.”
Minority sharesholders
Gumbi says for the deal to go ahead between Takatso and SAA there needs to be structural remedy. He says the commission insists that Takatso removes its minority shareholders from the merger deal.
It says this will eliminate the threat to competition in the aviation market.
“A fixed first remedy is required and that fixed first remedy is a divestiture remedy, so we say to Takatso, you brought the merger before us and we must assess the mergers brought before us. We can’t say to Takatso come back when you’ve reconfigured this transaction in or assist that merger. We have an obligation to assess any merger that’s brought before us, admit the parameters I’ve spoken about. There is that the minority shareholders, your minority shareholders must no longer be minority shareholders.”
SABC News economics journalists Nompumelelo Siziba reports that there have been issues of conflict of interest that have been raised regarding shareholders:
Formal bid
Representative for the Department of Public Enterprises, Advocate Michelle Le Roux says there was no formal bid done as per the procurement act for SAA. Le Roux says at the time, South African Airways was in a dire situation and the department had to go and look for interested parties to come and save the national airline.
Last month, Takatso Consortium made a merger application to the Competition Commission to approve the deal on an urgent basis by no later than 8 July 2023.
“What happened here, first of all, there was no tender, these were unsolicited expressions of interest given the state of SAA and its performance, so there was no tender run, there was no formal bid, acceptance process or any of those kinds of processes followed. “
