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Mixed feelings on the veil of secrecy over SAA-Takatso consortium deal

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The Department of Public Enterprises has maintained that the South African Airways (SAA) sale is governed by confidentiality.

This comes after Toto Investments Holdings took the Department of Public Enterprises to court over confidential information pertaining to the SAA-Takatso consortium deal.

On Monday, the Cape Town High Court granted Toto Investments access to certain confidential information regarding the deal. However, the company cannot share the information with a third party.

The company also wanted to interdict the implementation of the transaction for the introduction of a strategic equity partner in SAA. The High Court dismissed this with costs.

The Department of Public Enterprises welcomed the judgment.

Legal expert, Mina Tong Mongalo, says the investment company will still need to keep the information received confidential.

“The parties that are receiving the confidential information are still bound by the confidentiality meaning that they may not use that information either than the purpose of this litigation.”

On the other hand, aviation consultant, Dr Joachim Vermooten says since SAA is a public entity, its information should not have been kept confidential in the first place.

“I think the more transparency the better, there are many uncertainties from this transaction and I think apart from the court ruling it’s high time that the full contract is disclosed.”

While the department welcomes this judgment, it also has questions. In a statement, the department says it is clear that this is a political agenda that is intended to set back and disrupt the reforms of State-Owned Entities.

SAA equity partner deal yet to be finalised:

SAA briefs Parliament Committee on its finances

South African Airways Chief Financial Officer Fikile Mhlontlo says the outstanding audits for the previous financial years will be concluded in the last quarter of the current financial year, which ends in March 2023.

South African Airways board and executives appeared before Parliament’s Public Enterprises Committee. The cash-strapped national airliner briefed Members of Parliament on the annual report and the status of the multiple audit statements from 2017 to 2022 financial years.

Mhlontlo told the committee how SAA has been facing debt challenges.

“The business was heavily in debt with the debt position of R8.4 billion at a time resulting in annual financing costs of R1.4 billion. That level of interest charging is payable because of various loans that the business had raised.

You will see when we come to the income statement how this is negatively affecting the financial performance. Also, you will also note that during this financial year, there was an amount of R10 billion recapitalisation that came into the business, one it was then in part R7.4 billion to repay some of the loans and R2.6 billion which was to cover working capital or to cover operations”, Mhlontlo says.

South African Airways came under fierce criticism over its financial status and failure to submit previous financials on time.

African National Congress Member of the Committee Thokozile Malinga says it makes it difficult for Parliament to conduct oversight over SAA. The national airliner’s board and executive briefed the committee on the status of the multiple outstanding audit statements dating back to the 2017/2018 financial year until last year.

Malinga had various concerns and questions.

“What are the measures still in place for the audit finding of 2021/2022 financial year. And chairperson, I just want to check, is the strategic equity partner now on board? And what is their stance on the internal audit of this entity? And chairperson, given the fact that the people who did not submit the last financial reports, I think from 2017 up until was it last year, how are we going to get the financial reports? Because it’s not correct to oversee an entity to submit financial reports and expect us to do proper oversight, chair,” Malinga says.

Meanwhile, the Democratic Alliance’s Farhart Essack was equally not impressed with SAA’s presentation on past financial statements without touching on whether it has suffered current financial losses.

“This presentation remains just a tick box exercise. When the report is nearly four years old or four and a half years old and I mean so much has happened, Chairperson, in the interim. The issues that are at stake and that we really need to be discussing, instead of looking at a five-year presentation of financial statements with so much having transpired – I mean the issues that we should be interrogating is since SAA has resumed operations, you know, what are the operating losses – then thus far since it has resumed, for instance, what are the operating losses until the  31st of August 2022? We need to talk current terms, current facts.”

VIDEO | South African Airways: Making sense of Takatso Consortium 51% share in SAA:

 

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