The government has been caught up in its own lies about proposed funding by the Public Ivestment Corporation (PIC) of at least R10 billion for South African Airways. The Cape Messenger editor Donwald Pressly looks at the propaganda fault-line surrounding the issue
For much of Tuesday, the Gupta/Jimmy Manyi propaganda machine, ANN7, suggested that the chief executive officer of the Public Investment Corporation, Dan Matjila, was guilty of corrupt practices. Then, by the end of the day, National Treasury and the PIC held a joint press conference – featuring Finance Minister Malusi Gigaba and a host of Treasury luminaries alongside Matjila – and attempts were made to clear his name.
Although a number of newspapers had suggested that the political knives were out for Matjila – including the pro-government Independent Newspapers –Matjila stated he was very angry with the Sunday Times which in its Business Times supplement ran the headline: Matjiila: ‘Pic cash is the goal’.
The PIC head said he was considering his legal options – claiming the story, written by veteran journalist Chris Barron, was “inaccurate”. It is hard to believe anything which Matjila says, if that is the case. He told Barron: “I’ve got the keys. They’re looking for the keys to the big safe.” The “they” he was referring to was the Treasury. He referred to them in the Sunday Times as “politically connected people”.
But on ANN7 he was reported as rejecting reports that there were political plans to oust him. He has now changed his tune, describing the Sunday Times article as “distasteful, inaccurate and malicious”.
The Treasury said that his contract still had two and a half years to run. Matjila said the article, he thought, was “designed to drive the wedge between myself and the (finance) minister”. He said he had complained to the management at the media group which owns the Sunday Times. “We are weighing our legal options to try to deal with this matter properly.”
He reported that he enjoyed “good support from the minister … good support from the deputy (finance) minister (Sifiso Buthelezi)”. Buthelezi is chairperson of the PIC.
ANN7 was still not prepared to drop the defamatory story that Matjila was corrupt. It reported that when the then Finance Minister Nhlanhla Nene – who was fired by President Jacob Zuma in 2015 – was still in office, a deal to build an oil refinery in Mozambique had been struck by the PIC. Nene’s son, Siyabonga, served on the board of the deal’s facilitation company. It was implied that Matjila had smoothed this transaction to Indiafrec Trade and Investment Pty Ltd to the tune of R800 million.
The story about the intended funding of the PIC of SAA has been running for a while. SAA needs at least R13 billion to run for the next few years. It already owes billions of rand in guarantees – money it has borrowed from commercial banks, including Citibank. The government has guaranteed the loans.
It is understood that the Treasury has sought R10 billion from the PIC – something which Gigaba denied for much of the day on Tuesday. But at the press conference, covered by ANN7, it was clear that Treasury had, indeed, been looking to the PIC to fund SAA.
Treasury Director General Dondo Mogajane said at the press conference that “the PIC is not buying shareholding in SAA… but it was an option that we had looked at.” Referring to the plan to sell Telkom shares to finance SAA – a story which was also carried in the press – he said the sale of these shares “in a way that made sense” had been considered.
He acknowledged that the R1.8 billion which would have been raised from selling Telkom shares would not have been enough. “That conversation is ongoing,”
ANN7 reported that SAA made a R1.3 billion loss in the year to date. The entity already had R6.7 billion in government guarantees. Debt of R6.8 billion rand matured at the end of September. The propaganda service ANN7 said that SAA was renegotiating this debt for a period of at least 18 months.
Gigaba said he would not allow the media to drive a wedge between him and the PIC. “Should they try to drive a wedge… we will sit down and talk… and talk about them and address the issues which they are trying to achieve. Nobody is going to achieve those nefarious objectives. All of the things that people will try to throw at us… ultimately the truth will (prevail) over the lies.”
Buthelezi said that the board rejected stories that there had been plots to get rid of Matjila “with the contempt they deserve”.
Gigaba said he did not audit the annual financial statements of SAA – which were due six months after the end of the financial year. “I have no power over the annual financial statements,” said the finance minister.
Meanwhile the official opposition Democratic Alliance has welcomed Gigaba’s press briefing. But it said Treasury “must urgently clarify how the airline’s funding requirementsr, that are required in a mere four days, are going to be met”. Rather than making matters clear, as suggested by Mogajane, there more now more questions than answers.
Alf Lees, the deputy finance spokesman for the DA, said the ministers and Director General of Treasury had confirmed that the Treasury had held extensive discussions with the PIC on possible funding for the SAA bailout.
In addition, some lenders to SAA would not extend some or all of their loans to SAA beyond this Saturday. In addition, Lees noted, there was no possibility of a special appropriations bill in the existing time frame to secure funding to meet the repayment deadline of the SAA lenders – which include Citibank.
Despite what was confirmed, the DA said, the uncertainty remained over how the SAA funding crisis was going to be dealt with.
This uncertainty, Lees said, could not remain until the Medium Term Budget Policy Speech process was completed, and the people of South Africa could not afford to be left in the dark as to the details of the full recapitalisation plan for SAA that Treasury says would amount to R10 billion in 2017/18.
This matter would have a negative impact on the South African sovereign ratings, and should be clarified long before the Medium Term budget speech at the end of October.
Significantly, Higher Education Minister Blade Nzimande, who is also Secretary General of the South African Communist Party. told a Cosatu gathering during Wednesday’s strike against corruption that workers must keep an eye on the Public Investment Corporation.
He told workers that they must “get close to the PIC which has … your money, because it looks like the looters are coming close to it”.