The National Treasury has put former public enterprises director-general Kgathatso Tlhakudi at the centre of the appointment of Rand Merchant Bank (RMB) as transaction adviser to find strategic equity partners for SAA.
This is despite Tlhakudi's assertions that RMB was hand-picked by department of public enterprises (DPE) minister Pravin Gordhan.
The Treasury confirmed that it was Tlhakudi, who was dismissed in June last year for breach of his contract, who asked for approval to deviate from normal procurement processes and appoint RMB.
“The National Treasury’s office of the chief procurement officer is aware of a letter received on 24 July 2020 in which the DPE (through its Accounting Officer, DG K Tlhakudi) was requesting National Treasury to consider their application to appoint RMB as a Strategic Equity Partner for transactional advisory services,” it said.
“The department can only consider an application to deviate from normal procurement processes and either support, not support or support with conditions. In this case, and considering the procurement deviation rules, the National Treasury supported the deviation with the condition that other suppliers are not disadvantaged by the appointment of RMB and that the costs quoted are market-related.
“Evidence that the costs quoted are market related had to be submitted to National Treasury for verification. The clarification letter from DPE, dated 29 July 2020, indicated that the fee was market related.”
In his letter to Treasury, Tlhakudi detailed why the DPE requested the department to approve RMB’s appointment. The other companies considered were Investec and Nedbank. Investec was excluded according to Tlhakudi’s letter because it was advising Airlink, a competitor to SAA, and Nedbank as it lacked the capacity to advise on the deal.
“The average success fee for raising funding in the market is 0.5% and 1%...RMB is charging R25m on the planned funding requirement of R20bn. If 0.7% was charged it would amount to R140m which is way below what RMB is charging,” reads Tlhakudi’s letter to the then National Treasury DG Dondo Mogajane.
“I hope this demonstrates that the process followed is fair, equitable, transparent, competitive and cost effective,” Tlhakudi said.
In his protected disclosure to parliament, Tlhakudi said Gordhan made a special appeal to him that “RMB be appointed as the transaction adviser as they supposedly had the best aviation restructuring team in the market.”
Tlhakudi did not respond to requests to comment.
RMB said it was “duly appointed as a transaction adviser in July 2020 to assist the DPE in selecting a Strategic Equity Partner for SAA. As part of our mandate, we regularly engaged with the DPE”.
The Takatso-SAA deal fell through last month with Gordhan saying that in a post-Covid market a new valuation of the national carrier’s worth exceeded Takatso’s original R3bn offer, and negotiations on the new valuation led to the parties deciding to part ways.
Tlhakudi has alleged the decision by the DPE to choose Takatso reeked of corruption, putting Gordhan at the centre of his allegations. One of the allegations he has made is that he was excluded in the process to appoint Takatso.
Gordhan last month handed the portfolio committee several documents regarding the deal, including those that refer to the appointment of RMB and also how the Takatso Consortium was chosen as the preferred bidder.
One of the allegations put forward by Tlhakudi is that his signature was forged on a document giving the SAA-Takatso deal the green light.
The committee, which has butted heads with Gordhan for months over the SAA-Takatso deal, has since resolved to ask the Special Investigating Unit (SIU) to probe the transaction.
“The portfolio committee has adopted its report. In terms of procedure, the report needs to be adopted by the National Assembly in its next sitting. Then the acting speaker will write to the executive to communicate the resolution of the National Assembly,” the committee said.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.