Minister of Public Enterprises Pravin Gordhan’s decision to tarry on whether to take the tabled R336 million offer for embattled Mango Airlines by Ubuntu Airline Services may paint him into a corner as both legal precedent and rules of the Public Finance Management act (PFMA), along with the initial high court judgment, compel his compliance.
This comes as the National Union of Metalworkers of South Africa (Numsa) took up the issue yesterday to press the minister to take the sale offer as opposed to clinging to the almost defunct airline after a series of failures that make it impractical to hold on to it.
“The so-called concerns raised by the minister in his statement, which he claims are preventing him from making a decision, are nothing more than desperate and unnecessary delay tactics, because these issues were thoroughly ventilated in court. Numsa is demanding to know whether Gordhan intends to adhere to the court order, or whether his goal is to collapse Mango, like he did with SA Express,” general secretary Irvin Jim said in a statement.
Jim said the court described Gordhan’s behaviour as ‘irrational’ because its failure to act had placed Mango, the business rescue practitioner (BRP), the preferred bidder, and workers at the airline, in limbo as section 54 of the PFMA makes provision for automatic approval should the executive, in this case Gordhan, fail to respond within the prescribed time frame.
In a September 6 ruling, high court acting judge AJ Phooko ordered Gordhan to make a decision by October 6, and communicate the outcome and the reasons for it. If he failed to do so, it would be read that he had agreed to the sale.
“It is clear the minister is still obfuscating and delaying and he is refusing to make a decision. It is our view that the DPE has no interest in a viable Mango. The BRP has done everything that has been asked of him, but the minister keeps finding lame excuses to block the process from being finalised.”
Jim said the minister had opposed an application by Numsa and other trade unions for Mango to be placed in business rescue, only because he preferred to be in charge of the selection of the BRP. Now that the BRP had resisted the attempts of the Department of Public Enterprises (DPE) and the minister to manipulate him, the minister was now doing everything under the sun to frustrate the process.
A source in the DPE said it was not clear what Gordhan intended to do about the decision because he had not given an indication if he would be bringing the matter before Cabinet, though in his appearance before the portfolio committee on Public Enterprises yesterday, the minister bristled when asked whether the unbundling of Eskom was his own decision.
“We were mandated by Cabinet to look into the matter, the colleague ministers and others are working on a Cabinet directive, it is not my decision,” he said on the restructuring of Eskom into three divisions.
Mango business rescue practitioner Sipho Sono said the minister was already compelled by the court order of September 6 to make a decision either way on the sale, and it would be curious if he appealed to a higher court as it would expose delaying tactics.
“An appeal would be asking the superior court to allow him to postpone making the decision. This judgment makes the road forward clear to everyone. He is not being asked to approve the sale per se but he has to make a decision either way. Mango was not operational and I was asked to ground it by the same department until an investor was found, but now that there is an investor, the minister is asking to interrogate the business plan, which is not done,” Sono said.
The minister’s spokesperson, Ellis Mnyandu, had not responded to questions on what the minister’s next move would be or if he would take the matter to Cabinet for a decision.
Jim noted that since 2021, when the business rescue practitioner tabled the business plan to be adopted, SAA and the DPE refused to adopt the plan unless Mango got an equity partner. Now the equity partner had been obtained, the minister did not want to make a decision.
It is the DPE and SAA that insisted that Mango must be sold and their conditions for the release of the R800m needed to fund the business rescue were that the plan must be amended, and an equity partner must be found.