Gordhan applies for leave to appeal Mango sale judgment
Last month the Pretoria high court gave the minister 30 days to make a decision on the sale
The department of public enterprises has applied for leave to appeal a Pretoria high court judgment handed down last month that ordered minister Pravin Gordhan to decide on the sale of SAA subsidiary Mango as proposed by the airline’s business rescue practitioner within 30 days.
The decision to apply for leave to appeal against the September 7 judgment was based on legal advice, the department said in a statement on Monday.
Shortly after the judgment was handed down Gordhan said he would not be “bullied” into making a decision and had a duty to apply the law.
The department’s statement said that “the intention of this application is to ensure that all aspects of Mango’s business rescue process are transparent, legally sound and in the best interest of the South African public.
“This is not a stalling tactic or an attempt to undermine the need to bring finality to Mango’s business rescue process.”
The statement said Gordhan was still awaiting the information from the business rescue practitioner on a detailed business plan to assess the viability of the consortium that intended to purchase Mango, a comprehensive due diligence and the foreign ownership details of the consortium to comply with the law. The minister needed this information to make a decision on the application, the department said.
However, the business rescue practitioner Sipho Sono told the Pretoria high court that he had informed Gordhan that no further information would be provided and acting judge Moses Phooko ruled that this was the end of the matter and that Gordhan was obliged to take a decision within 30 days of the judgment.
If he failed to do so, Sono could legitimately assume in terms of the law the sale had been approved. Sono’s court application was brought in February with the support of the National Union of Metalworkers of SA (Numsa).
Phooko found that Gordhan’s failure — lasting several months — to make a decision in terms of the Public Finance Management Act (PFMA) was “unlawful and constitutionally invalid”.
The status of the business rescue practitioner’s application “cannot eternally remain in limbo,” the judge said. “I do not see how a delay in taking a decision could be considered as rational.”
Mango went into business rescue in July 2021 and an unnamed consortium has been selected to purchase it but Gordhan’s delay in reaching a decision on the sale threatens to subvert it.
The consortium has been waiting since November 2022 for approval of the deal. If the transaction fails, Mango will have to be wound down in terms of its business rescue plan.
Sono told the court that he was concerned about disclosing the business case of the chosen investor as Mango is likely to compete with its parent company, state-owned SAA. He argued that there was no basis for Gordhan to demand further information.
Gordhan and the department of public enterprises argued that a declaratory order compelling the minister to take a decision about an incomplete and unsatisfactory application was without merit. They also contended that the court should be slow to interfere with statutory powers that are exclusively in the domain of the executive and legislative branches of government unless such intrusion is sanctioned by the constitution.
Phooko rejected Gordhan’s contention the 30 days provided for in the PFMA for the minister to take a decision does not apply until he is “satisfied” with the information provided to him. Gordhan’s counsel argued the 30-day requirement did not apply as Gordhan had requested more information on December 21 2022.
Numsa submitted that all efforts should be explored to save Mango as its retrenched members would be re-employed if Mango resumed operations. It also argued that Gordhan’s delay in making a decision could result in the winding-up of Mango if the business rescue plan were to fail.