South African Airways’ failed privatisation is to undergo scrutiny after being referred by parliamentarians to special investigators.

The country’s government had intended to divest 51% of the flag-carrier to the Takatso consortium.

But the process has taken more than two years and eventually collapsed in March after the two sides were unable to reach agreement on renegotiated terms.

The government’s portfolio committee on public enterprises, which has been probing possible irregularities in the sale, has decided to refer the privatisation’s failure to the Special Investigating Unit or, if necessary, another law-enforcement agency.

SAA A320-c-Bob Adams Creative Commons

Source: Bob Adams/Creative Commons

Takatso had sought a majority share in South African Airways

It has highlighted a number of issues. “The committee is concerned about the undervaluation of South African Airways and the need for a comprehensive evaluation of the business,” it says.

“It is essential to address the sequence of events that led to the undervaluation and to investigate any potential corruption or misconduct in the process.”

The committee says the matter is complex and demands a “thorough and credible” investigation.

It believes the Takatso consortium was not included on a Rand Merchant Bank shortlist of potential strategic partners, and says it “seeks to understand” the reasons why the bank wanted to be released from its role as an advisor on the purchase.

“Parliament needs to play an integral and meaningful role in government transactions of this magnitude,” the committee says, including overseeing transactions in which state assets are sold to the private sector.