South Africa sued over $3 sale of troubled national airline

Bloomberg

South Africa’s government and national airline are being sued by a little-known investment firm, which wants the sale of a majority stake in the carrier scrapped and re-run due to a lack of transparency.
This year’s acquisition of 51% of South African Airways (SAA) by the Takatso Consortium — made up of a local
jet-leasing company and a private-equity firm — for just
$3 was “unlawful and constitutionally invalid,” according to documents filed at the High Court in Cape Town by Toto Investment Holdings Pty Ltd.
The transaction was “shrouded in secrecy” and “not fair, equitable, competitive or cost effective,” according to the filing by Toto founder Bongani Gigaba, who says his firm was unfairly excluded from the deal. “Toto was a direct victim of the unlawful and secretive process.”
The filing is the first legal action against the sale, which has drawn criticism from the National Treasury, opposition parties and media in part due to the lack of proceeds for the taxpayer. Yet the airline had been a drain on government finances for a decade, receiving numerous state bailouts before entering bankruptcy proceedings in 2019.
After a substantial reorganisation that saw staff numbers cut by almost 80%, Public Enterprises Minister Pravin Gordhan initiated a sale process that eventually led to the agreement with Takatso, made up of Global Airways, which owns domestic airline Lift, and private-equity firm Harith General Partners.
SAA then resumed flying to nine domestic and international destinations with a fleet of six Airbus SE jets.
The Department of Public Enterprises is studying the court papers and will oppose the application, a spokesperson said. SAA and Takatso referred questions to the DPE. The National Treasury declined to comment.
SAA was one of the key subjects of a lengthy South African judicial inquiry into state corruption under the presidency of Jacob Zuma, who was ousted by Cyril Ramaphosa in 2018.

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