The South African government and the national airline are being sued by a little-known investment firm, which wants the sale of a majority stake in the carrier canceled and rolled over due to a lack of transparency.
This year’s acquisition of 51% of South African Airways by the Takatso Consortium – made up of a local jet leasing company and a private equity firm – for just $3 (R51 at the time) was ” unlawful and constitutionally invalid,” according to documents filed in the Cape Town High Court by Toto Investment Holdings Pty Ltd.
The transaction was “shrouded in secrecy” and “not fair, equitable, competitive or profitable”, according to the filing of Toto founder Bongani Gigaba, who claims his company was unfairly excluded from the deal. “Toto was a direct victim of the illegal and secretive process.”
The filing is the first legal action against the sale, which has drawn criticism from the National Treasury, opposition parties and the media in part due to the lack of taxpayer proceeds. Still, the airline strained public finances for a decade, receiving numerous bailouts from the state before entering bankruptcy proceedings in 2019.
After a substantial reorganization that saw the workforce reduced by almost 80%, Public Enterprises Minister Pravin Gordhan launched a sale process that ultimately resulted in the deal with Takatso, made up of Global Airways, which owns the airline. domestic Lift, and private equity firm Harith. General partners.
SAA then resumed flights to nine domestic and international destinations with a fleet of six Airbus SE jets.
The SAA has been notified of Toto’s lawsuit and the Department of Public Enterprises will respond, a spokeswoman said in an email response to questions. Takatso referred questions to the DPE and the National Treasury declined to comment. The DPE did not immediately respond to a request for comment.
SAA has been one of the main subjects of a long South African judicial inquiry into state corruption under President Jacob Zuma, who was ousted by Cyril Ramaphosa in 2018. Under President Dudu Myeni – the director of Zuma’s foundation – the airline has regressed into an “entity plagued by corruption and fraud,” according to findings released Wednesday night. Both Myeni and Zuma deny wrongdoing.
Toto, of which Gigaba is the sole shareholder, filed an expression of interest with SAA which was rejected within days, according to the documents. The government has often said it had several interested buyers in the months leading up to the announcement of Takatso’s sale, but never identified them.
Toto is part of a consortium that controls a 24% stake in Richards Bay Minerals, majority owned by mining giant Rio Tinto. The investment is worth up to 15 billion rand ($938 million), Toto said in court documents.
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