RETIRING Public Enterprises Pravin Gordhan has not ruled out a Constitutional Court challenge as he continues to fight business rescue practitioner Sipho Sono’s bid to sell low-cost airline Mango despite suffering several legal setbacks.
The Supreme Court of Appeal (SCA) last week dismissed the ministers’ challenge to Gauteng High Court, Pretoria, Acting Judge Moses Phooko’s ruling in September 2023 ordering Gordhan to decide within 30 days whether or not he was giving the sale of the troubled national carrier SAA’s shares in the state-owned low-cost airline.
Failure to make such a decision in the stipulated period would have been deemed as approval of Mango’s sale in terms of the Public Finance Management Act (PFMA).
However, Gordhan and his department appealed Acting Judge Phooko’s ruling at the High Court but his challenge was dismissed in December.
Gordhan and his department failed to file their application for leave to appeal timeously in terms of the SCA rules.
Sono said Gordhan should have appealed Acting Judge Phooko’s ruling timeously at the SCA or decline the PFMA application.
Gordhan explained that he had lodged the SCA appeal to ensure that he obtained legal certainty on the application of the PFMA to transactions similar to Mango’s sale.
He said Mango could not be sold without oversight, which Sono disputed as incorrect, as well as that there was conflict between the PFMA and the Companies Act, under which companies are placed under business rescue, among others reasons.
Gordhan’s spokesperson Ellis Mnyandu told the Sunday Independent that the minister will be receiving legal advice shortly.
”Please be reminded that the Minister is on record having said previously that he will do everything that he is mandated to do to safeguard public interest in this matter,” he said.
Mnyandu added that Mango belongs to South Africans and it is thus incumbent upon Gordhan to exhaust all possible avenues to ensure that the integrity of the process to restructure the low-cost airline is preserved.
On February 14, Gordhan, in a letter to SAA interim board chairperson Derek Hanekom, declined the national carrier’s application to dispose its shares in Mango in terms of the PFMA.
Gordhan said he was awaiting the outcome of his petition for an appeal of Acting Judge Phooko at SCA among the reasons.
Last year, Gordhan asked the SAA board for a comprehensive report on the preferred bidder, its potential loss if the disposal of the shares proceeded, clarity on the proceeds of Mango’s sale, rationale for allocating them to the low-cost airline’s concurrent creditors, and the potential new owners’ business plan.
He did not receive the information from SAA and Sono told him he would not provide the details and instead filed the now successful lawsuit in February 2023.
Sono this week said Mango did not as yet have any indication on what steps Gordhan and Godongwana intend to take, if any, after the SCA’s dismissal of their application for leave to appeal.
In court, Sono insisted that it was not in the national and public interest for Gordhan and Godongwana to succeed.
”The long-awaited disposal of SAA’s shares in Mango to an investor and the success of its business rescue process is of national importance and is in the public interest. The applicants’ (Gordhan and his department) persistent attempts to frustrate this is not of national importance or in the public interest,” he explained.
Sono previously indicated that some employees who accepted voluntary severance packages or were retrenched will be considered for re-employment should Mango fly again, which means nearly 900 people will be able to put food on the table and that each supported five others on average.
Mango’s preferred buyer is Ubuntu Air Services, a partnership between AfricaStay, which describes itself as South Africa’s largest specialist wholesale tour operators to destinations in the Indian Ocean, and DG Capital.
According to Sono, the investor has confirmed its readiness to proceed with the transaction, which he believes will yield a positive outcome for Mango’s creditors, unflown ticket holders, Mango’s former employees and the general flying public.