Gordhan | 'I won't be bullied, I am studying judgment on sale of troubled airline Mango'.
By Lehlohonolo Lehana.
Public enterprises minister Pravin Gordhan says he would not be intimidated to submit to pressure that certain elements, with zero regard for public interest, sought to exert on him and the department regarding the business rescue process of Mango Airlines.
This comes after the North Gauteng High Court in Pretoria earlier this month compelled Gordhan to decide on the airline's sale within 30 days and if he fails to do so, the sale will go ahead regardless.
Mango was placed in voluntary business rescue on 28 July 2021, with the BRPs appointed in August of that year.
In a statement on Tuesday, Gordhan said he is studying the judgment by acting judge Moses Phooka, who ruled that if Gordhan fails to make a decision within the stipulated time period on the application by business rescue practitioner Sipho Sono for the sale of Mango, then Sono can legitimately assume in terms of the law it has been approved.
Phooko found that Gordhan's failure — lasting several months — to make a decision in terms of the Public Finance Management Act (PFMA) was "unlawful and constitutionally invalid".
The status of the business rescue practitioner's application "cannot eternally remain in limbo", the judge said. "I do not see how a delay in taking a decision could be considered as rational.
"The failure to take a decision within a reasonable time is an infringement of the fundamental right to just administrative action," Phooko said, referring to the constitutional provision that enjoins functionaries within organs of state to "perform diligently and without delay all constitutional obligations".
The minister argues that he has a legal obligation to protect the public interest and insists that he still does not have the information he has been requesting, so he cannot make an informed decision on Mango.
"My duty as the executive authority is to safeguard the interests of South Africans. At no point will I abandon my fiduciary responsibility to ensure that any decision that is taken regarding the future of Mango is consistent with the prescripts of the law and is in the best interest of the public," he said.
"The issues around this case evolve around my request for further information from the business rescue practitioner. This is what the Public Finance Management Act (PFMA) requires in order to make a judiciously sound decision," he said.
The minister said he had requested the following information from the business rescue practitioner to enable him to make the decision on the PFMA Section 54 (2) application
- Detailed business plan to assess the consortium's viability.
- Comprehensive due diligence.
- Foreign ownership details to comply with South African laws.
Despite several requests, he says this has not been furnished.
"While we respect the decision of the court, the department will ensure that we follow all the prescripts of the law in terms of how we execute on our responsibility to put all our SOCs on a stable footing," he said.
In the latest BRP update on Mango, the group said that the investor is still waiting in the wings on the transaction, but should the process continue to hit the brick wall, it could pull out.
Meanwhile the National Union of Metalworkers of SA (Numsa) has called on Gordhan not to appeal last week's Pretoria High Court decision.
Numsa's national spokesperson Phakamile Hlubi-Majola accused the minister of trying to sabotage Mango’s survival chances, saying: The reason Gordhan failed to act was to sabotage chances of survival. He doesn't want Mango to compete with SAA. He just doesn’t want Mango to be profitable.
Hlubi-Majola believes Gordhan wants Mango to collapse just as SA Express did.
"He must just back off so that this process could conclude. He must just not appeal this judgment like he did to all other judgments."
The consortium, which has not yet been named, has been waiting since November for approval of Gordhan's deal in terms of the PFMA.
Gordhan has also dismissed allegations of impropriety in the handling of the Takatso/South African Airways (SAA) deal.
He said that allegations levelled by former Director-General Kgathatso Tlhakudi when he wrote to Parliament were "unfounded" and "unsubstantiated".
He added that the private equity deal was above board and approved by Cabinet.
He said that any attempt to cast the deal in a bad light was political.
"The allegations have no foundation whatsoever in actual facts, that this is part of political smearing."
Public Enterprises Portfolio Committee chairperson, Khaya Magaxa, said the committee would now consider Gordhan's responses at its next meeting before finalising the matter.