PIC says it is not funding Takatso takeover of SAA

The Public Investment Corporation (PIC), the government’s asset manager, says it is not involved in funding the takeover of SAA by consortium Takatso.

Takatso is composed of Harith General Partners, which manages two private equity infrastructure funds, and Global Aviation, an aircraftleasing company.

Takatso has undertaken to put R3bn into SAA over the next three years.

The PIC, which manages public servants’ pensions on behalf of the Government Employees Pension Fund (GEPF), said on Monday that although it owns 30% of Harith, it is not involved in the acquisition of SAA.

The acquisition has raised eyebrows among various parties, including labour unions and opposition parties, which have questioned whether the government paid for the airline using public servants’ pension money, considering the historical links between the PIC and Harith.

The government will retain 49% of the shareholding of the airline, which could be diluted over time if the airline requires a further private capital injection.

“Whilst it is a fact that the PIC has shares in Harith General Partners, it must be stated that the PIC is not a member of Takatso consortium,” the PIC said in a statement.

While the PIC is not invested in Harith’s Pan African Infrastructure Development Funds (PAIDF 1 and 2), the GEPF is a direct investor alongside commercial banks and development finance institutions.

The PIC was instrumental in founding Harith and invested R20m as seed capital in the start-up. It appointed former PIC executive Tshepo Mahloele as CEO of Harith.

Mahloele is now the chair of Takatso and also chair of Lebashe Investment Group, the owner of Business Day.

Harith established and manages the PAIDFs, which invest in a range of infrastructure assets in SA and across the continent.

The investment was subject to investigation at the Mpati commission, which found that Harith’s conduct was driven by “financial reward to its employees and not returns to the GEPF”.

The commission also found that the seed money invested by the PIC has been repaid by Harith.

UDM president Bantu Holomisa has called for parliament’s standing committee on accounts and the public enterprises committee to investigate whether the transaction is above board. “We have absolutely no information, but given the players we can speculate,” Holomisa said.

“What if PIC funds (in other words, government pensioners’ monies) were leveraged to finance a potentially fatally risky deal with government? It would be very wrong and illegal and, ironically, government would in the end be bailing out SAA yet again,” he said.

In 2020, Holomisa lost a bid to appeal against an earlier court ruling barring him and his party from making defamatory statements about Harith after he wrote an open letter to President Cyril Ramaphosa alleging the company had been involved in dodgy dealings with the PIC.

WHILST IT IS A FACT THAT THE PIC HAS SHARES IN HARITH GENERAL PARTNERS, IT MUST BE STATED THAT THE PIC IS NOT A MEMBER OF TAKATSO CONSORTIUM

R3bn how much Takatso has undertaken to put into SAA over the next three years

30% of Harith General Partners is owned by the PIC