Telling empowering stories, South Africans want to hear

Thursday, 07 September 2023 16:02

Government given 30 days to decide Mango Airlines' fate.

By Lehlohonolo Lehana.

Public enterprises minister Pravin Gordhan has been ordered by the Pretoria high court to take a decision on an application by Mango's business rescue practitioner for the sale of the airline within 30 days.

If he fails to do so, the business rescue practitioner can legitimately assume the sale regardless.

Gordhan's actions were called unlawful and unconstitutional.

The Public Finance Management Act's Section 54 makes provision for automatic approval should the executive, in this case Gordhan, fail to respond within the prescribed timeframe.

Mango needs Gordhan's approval to implement the adopted business rescue plan, which contemplates SAA selling all its shares in Mango to an investor.

According to a previous business rescue report by rescue practitioner Sipho Sono, an updated application for approval in terms of the PFMA had been submitted to Gordhan by SAA on 28 November 2022, addressing issues raised by SAA against the proposed sale of Mango.

Sono claims that Gordhan has repeatedly requested additional information from SAA or of him as the rescue practitioner, "despite the fact that I have already furnished the relevant and necessary information to him to make a decision".

He regards Gordhan's repeated requests for further information as "unnecessary delays that constitute a manifest breach of the PFMA".

In his ruling, acting judge AJ Phooko of the Gauteng High Court in Pretoria supported the confidentiality of the information that Sono did not want to share, and compelled Gordhan to base his decision on the set of information in his possession. Furthermore, the judge called the minister’s inaction irrational and also in violation of the Constitution in terms of responsibly of discharging his duties.

In contemplation, Phooko said Gordhan should have already made his decision within 30 days of Sono's refusal to provide further information on Mango's potential buyer. Gordhan didn’t.

The Constitution demands public office bearers exercise power responsibly and rationally. Judge Phooko wrote: "I do not see how a delay in taking a decision could be considered as rational," and described rationality as the minimum threshold requirement "applicable to the exercise of all public power by members of the executive and other functionaries…"

Gordhan's inaction delayed the offloading of Mango just short of a year and could have forced the liquidation of the company instead of a resuscitation. Some industry insiders viewed the minister's actions as deliberate.

SAA in the past publicly defended Gordhan's delays in the Mango deal when it told media that the minister had every right to demand further information and previously suggested that there was a material conflict in the transaction. 

Mango has been in business rescue since July 2021 – an extraordinarily long period of time.