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
According to documents filed at the High Court in Cape Town, this year's acquisition of South African Airways by the Takatso Consortium was "unlawful and constitutionally invalid."
The transaction was shrouded in secrecy and not fair, equitable, competitive or cost effective according to a filing by the founder of the company. Toto was a victim of the secret process.
The National Treasury and opposition parties have criticized the sale due to the lack of proceeds for the taxpayer. The airline had been a drain on the government's finances for a long time.
The airline sale for $3 keeps the financial burden for South Africa.
After a reorganization that saw staff numbers cut by almost 80%, Pravin Gordhan initiated a sale process that eventually led to the agreement with Takatso, made up of Global Airways, which owns domestic airline Lift.
The airline flew to nine domestic and international destinations with a fleet of six planes.
The department of public enterprises will oppose the application. Questions were referred to the DPE. The National Treasury wouldn't say anything.
One of the key subjects of a lengthy South African judicial inquiry into state corruption was the South African Airways (SAA). The airline was racked by corruption and fraud under Chairwoman Dudu Myeni. They denied wrongdoing.
The documents show that the expression of interest was rejected within days. In the months leading up to the announcement of the Takatso sale, the government said it had several interested buyers, but never named them.
Rio Tinto owns a majority stake in Richards Bay Minerals, which is controlled by a group of people. According to the court documents, the investment is worth as much as 900 million dollars.(Updates with government response in seventh paragraph)