DPE Minister Pravin Gordhan has been given 30 days by a High Court judge to come to a decision regarding the proposed sale of defunct airline Mango to an unnamed investor. And should he fail to do so, the sale will automatically be approved.
Despite ongoing business rescue efforts, proceedings have been on hold due to the alleged failure by Minister Gordhan to make a decision to approve the sale.
Business Rescue Practitioner, Sipho Sono, along with NUMSA, brought the case in order to progress the stalled business rescue.
The PFMA’s Section 54 provides for an automatic approval, should the executive, in this case Gordhan, fail to respond within the prescribed time.
The DPE is alleged to have stalled the resolution of the rescue by demanding additional information about the airline’s potential buyer. This resulted in a stalemate, as Sono said he was obliged to withhold the information because it was confidential.
Acting Judge AJ Phooko’s ruling was that the information was indeed confidential, and furthermore that Gordhan was indeed required to make the decision based on the information that was provided.
The Court called the Minister’s inaction not only irrational but also a violation of the Constitution (regarding the Minister’s responsibility to discharge his duties).
Judge Phooko said the Minister was obliged to have made the decision within 30 days of Sono’s refusal to provide further information on Mango’s potential buyer. He said the Minister’s inaction had delayed the resolution of the situation at Mango for almost a year and this could have resulted in the liquidation of Mango.
Sono has taken the DPE to court previously during the business rescue process, when bailout funds were not released by the Minister, as had been promised. The DPE was then compelled by the court to release the funds.
Sono told The Citizen that the delay had been to the country’s detriment. “Seven months have been wasted by the DPE to the detriment of Mango’s unflown ticket holders and former employees that by now could have been re-employed. The cancellation and suspension of Mango’s licences is a direct result of the frustrating actions of the DPE and the Minister.” Sono, along with co-applicant Numsa, also argued that former Mango employees had also lost out on regaining possible re-employment at a revived Mango due to the delay.
The Minister of Finance, Minister of Public Enterprises, the Department of Public Enterprises and Treasury were ordered to pay costs.
