SA Tourism on Tottenham Hotspur sponsorship deal, with Minister
07 February 2023
Chairperson: Ms T Mahambehlala (ANC)
The South African Tourism (SAT) Board was present for the briefing on the alleged billion rand sponsorship deal with Tottenham Hotspur Football Club and the Minister was later summoned. SAT discussed its strategic rationale; the sponsorship opportunity and potential return on investment should the project go ahead. It also addressed the questions that were in the public domain. For the last two years, South Africa’s tourism sector has been severely and negatively impacted due to the COVID 19 global pandemic. SAT’s ability to communicate and create demand, for leisure and business events had been impacted. For SAT to break through the noise and reclaim its position in the global travel community, it would need a step change growth strategy and a series of big strategic and specific actions. To this end, SA Tourism had engaged with the English Premier League club, Tottenham Hotspur Football Club (THFC) to be a tier one partner of London’s most valuable football brand and the 8th most valuable football brand worldwide. Some SAT board members, including South Africa’s High Commissioner in the UK have been on a tour at the Tottenham Hotspur Stadium to assess and verify the feasibility of this proposed venture. It was a three-year deal commencing at the beginning of the 2023/24 English Premier League (EPL) season and terminating at the end of its 2025/26 season. The deal was structured as a media deal as main deliverables of the partnership is around broadcast, digital and social media. A THFC partnership would deliver £270 million (ZAR 5.6 billion) of total media value across the term. In exchange for the investment, THFC would deliver partnership value to SAT in various categories. In year one, there would be an investment of £6.5 million. In year two, there would be an investment of £18 million. In year three, there would be an investment of £18 million. The total cost of the deal would be £42.5 million.
Committee members raised concern about the role of Mr Johan van der Walt, SAT Interim Chief Financial Officer, had in this deal and his relationship with the WWP Group. Since there was a conflict of interest, Mr van der Walt should tender his resignation. The document was leaked by the whistleblower as there was something untoward. Members asked what was discussed at the SAT board meeting and why was the public not informed prior to a decision being made. The SAT board could not operate in isolation to the real conditions that South Africa found itself in and carry on this way with taxpayer money. Auditor-General South Africa (AGSA) had previously raised concerns about SAT leadership stability and governance and the new board should have focused on that before considering a financial obligation of this magnitude. Members also raised concern over the board composition. The Committee would not be comfortable agreeing to such a proposal without SAT having permanently employed people in strategic positions. Members found it very strange that last week three SAT board members had resigned; then out of the blue, the Minister appointed three board members to fill those vacancies. It was recommended the Committee should write to the Speaker as its oversight model did not allow it to stop such processes. The Minister was abusing her powers in this process. The absence of the political leadership of the Department was of great concern to the Committee. Members were shocked that the Minister in her media briefing said she knew nothing about the deal. That was a great concern as the role of the board was to advise the Minister on deals like this one.
The Chairperson commented that this fiasco was egg on the face for the people who were representatives of this government. The Committee agreed that the proposed deal with Tottenham Hotspur must come to an immediate stop. It also agreed that Mr van der Walt must leave his position immediately. His presence in SAT presented a conflict of interest in this matter. It resolved that an urgent Committee investigation should be done into the proposed sponsorship deal.
The Chairperson said perhaps she was not the only one who was amazed by the meeting turnout. The room was so full and there was interest from the media. It was for the first time this Committee got so much attention from the communicators of the country. That was an indication of how important the subject was to South Africans and the taxpayers. She welcomed all Members and the South African Tourism board. The way the room was so full she suspected there were also Tottenham Hotspur members. The Committee was gathered today on a very important subject matter. She was a bit confused as she did not know who was going to be leading the SAT board which had been appointed for less than three months. She could confidently say that this board had had three chairpersons already in less than three months. There was a new chairperson, who would be the leader of the delegation of the board. She saw the other board chair here. It has had two different deputy chairs. The board was a mixed masala. It characterised the situation that the country found itself in. Clearly there was instability there. It could never be correct that in less than three months since the board appointment, it has had three different chairpersons and two different deputy chairs. Certain Committee members have filed their complaints to the Chair on this or that matter. South Africans were looking at the Committee and the outcomes of this particular meeting, in providing direction to the country. The Committee’s oversight role was being tested today. The Committee needed to be mindful of that fact. South Africans would be looking at whether the Committee was decisive or indecisive in what it did as legislators, in its oversight role over entities and the executive. Everyone had seen the agenda. That was why there was a pool of communicators in the Committee for the first time.
The Chairperson was confused because the Minister was not present in the meeting. The Committee had a board that was not introduced to it officially. That alone was problematic. It was very problematic. This board was new to the Committee. The ones that the Committee had known to be chairperson, deputy chairperson and board members were no longer at the helm. There was a new collective. She was not sure; she would put the matter before the Members to guide on how the meeting should proceed. The Deputy Minister had submitted an apology to the Committee Secretary. The collective that was present was leaderless in terms of the political office. She noted Members who had raised their hands.
Mr H April (ANC) said that in the absence of the Minister and the Deputy Minister – the Minister who in particular had been snubbing the Committee for the longest time – the Committee should give the Director-General the opportunity to give the Committee guidance as to what was happening in the Department now. He was very shocked that the Minister was not present at such an important Committee meeting. It showed the kind of disrespect for this Parliament and the work that it did. He wanted that to be recorded.
Mr M De Freitas (DA) said that he wanted to make a proposal. The issue of the Minister was a longstanding one. Perhaps it could be discussed later in the meeting or in a future meeting, that was up to the discretion of the Chairperson. The Committee should discuss the business of the day. It was irregular that the Minister was not introducing the board, correctly. Later in the meeting or in another meeting the Committee could decide how to deal with the matter of the Minister, because there were outstanding issues there. The country was looking for some direction on this particular sponsorship matter. He was also confused about the board, because the SAT website did not match what was happening in reality. Whoever represented the board should start off the conversation and then the presentation take place. It was a bit weird that the board would show the Committee direction. The Committee should deal with the matter today.
Ms L Makhubela-Mashele (ANC) raised her concern that the person now chairing the SAT board was not a part of the previous board, according to the information the Committee had. The chairperson was not a part of the composition of the board. She assumed that meant there were vacancies that were filled. She wanted to understand the process of filling these vacancies. She stood to be corrected on this point but board members appointed to an agency must go through the concurrence function where Cabinet would release a memo to say that these board members were appointed to this agency or entity. She wanted to find out the process for filling the vacancies. Although the Committee was now asking itself this as the Minister was not present to respond to this. Three members had resigned and people were subsequently appointed as board members. The one was chairing the board. She wanted clarity so the Committee understood the composition of the board before it. She noted that the current board chair was not even part of the process that unfolded. Then it was expected for the board chair to come and respond to the Committee and provide information on this proposed deal. She was not sure if she was confused or lost. She sought the help of her colleagues in moving forward, so that she did not get lost as a Member of Parliament.
Ms M Gomba (ANC) said that perhaps the Committee should have started with the agenda so Members were able to see the apologies. To see who was here and who was not here. She was worried about the absenteeism of the Minister. The reporting patterns to this Committee were worrisome. Maybe the Committee should hear the apology of the Minister as to why she was not in the meeting and the reasons she could not appear before the Committee. That could possibly assist in going forward in this meeting.
Ms P Mpushe (ANC) said that she was confused and this move was deliberate. If the board was here without the Minister then how had they planned to interact and engage with the Committee? This move was deliberate in that the board wanted to continue doing what they were doing, chowing department money without accounting. She was not sure where the Director-General was. If the Minister was present, she would have proposed that those board members who had been elected with all the reshuffling that had taken should leave the meeting. Since the Minister was not present, the Committee could not allow the board members who had just been elected to respond to things and the actions of the Minister. The SAT was not just an entity that could do things as they wished. There was an Act that governed their operation. She wished that the Committee would do as it did previously. To allow the board to leave the meeting until the Minister decided to appear in front of the Committee. This was a serious undermining of the Committee by the Minister. The Committee had expected her to appear before it in terms of the summons it had forwarded to her office. She was so disappointed that the Minister was not here for the Committee to get clarity as to what transpired that had not been accounted for and did not appear in the operational plan of the board. It was deliberate.
Ms S Xego (ANC) condemned the absence of the political leadership of the Department. There had been resignations. There had been a change of portfolios. Whatever had happened within SAT, she had questions to ask. Maybe the CEO could answer her concerns. What was the full complement of the board? What was board quorum? This needed to be known so that the Committee was able to detect if the decisions taken or going to be taken, were quorate decisions. She proposed that the delegation introduce itself. The Committee needed to take a decision. She had been on this Committee for the past seven years and there was a legacy in SAT. Now she had some questions. Those that had resigned, were they here? Those that had been recruited recently, they would introduce themselves. Maybe when the board introduced itself, the Committee would be able to get an idea of who suggested the sponsorship. She read somewhere that it was only three people who were dealing with the sponsorship. Maybe they were amongst the delegation. The Committee should proceed with the delegation introducing itself.
Ms S Maneli (ANC) said that there was a pattern here. Maybe the Committee was too predictable. The board knew that if no political leader present, the board would have to be chased away. The Committee needed to change that. She was worried. The Committee had a responsibility of oversight. Currently, the country was speaking about the Committee. The Committee could not fail the country because of people who had a deliberate move to ensure that they did not account to the Committee. The Committee should exercise that responsibility. It should hear the presentation. The issue of the Minister, the Committee would have to deal with it afterwards. The Committee had an outstanding matter with the Minister. The Committee could still revisit that.
The Chairperson said that some questions Members had raised, the Committee would not get answers today. The Committee might get answers in the near future, but not today. The Minister was a law unto herself. The Minister never attended Committee meetings. The Minister was still not here on a crucial matter, where the country was abuzz by the actions of the entity that she was supposed to take responsibility for. Also present in the meeting were NCOP Members. She was not sure if the Committee really wanted the board members to reintroduce themselves. However, if Members so wished then that was what the Committee would do. The Chairperson did not see the Director-General in the meeting. This board was headless. There was no Department. There was no Ministry. There was no new Director-General. The old Director-General was back. He had responded to a letter as to why he should not be removed from office. He was back from leave. The Director-General indicated that he was struggling with flights. He was not here. Members had the SAT delegation list who were present in the meeting. The Acting CEO was here but he could not answer all the Committee’s questions. The process of filling vacancies was stipulated in the Act. One crucial matter was that board appointments must be gazetted. She had not seen these new names in the gazette. Perhaps it was deliberate so that one could just chop and change and not have hassles. The Committee was in an entanglement. The Committee was in a Tottenham Hotspur’s match, which it knew nothing about. This meeting sought to understand exactly what had transpired. The Committee had seen the CEO talking to South Africans very arrogantly in the media briefing. The CEO had spoken to South Africans as if speaking to his kids at home. Now was an opportunity for the CEO to look at the Committee and tell it all that he had presented there. Not looking into the camera as he consistently highlighted, ‘Let me look into the camera and say this. Let me look straight in the camera and say this’. That was an embarrassing moment for the Committee. The Committee did not take it lightly. Members had received calls asking who was the CEO? The Members did not know how to respond to that question. The Chairperson would allow the CEO to present to the Committee on this matter. The new board members, like Dr Thozamile Botha, would listen. They would not say anything here because the Committee did not want to be misled on matters of importance. What was amazing was that the board additions were not from the 28 that were shortlisted. They were outside that selection. In that 28 were highly qualified persons. There was the embarrassment of seeing a person who only had a senior certificate compared to the educated persons that were t shortlisted. Some board members were persecuted because of security clearance. She wondered if these additions had been vetted. Or were they just put into the board? The Committee would get into the detail why there had been chopping and changing of the board chair. Some of these things were raised in the last meeting. The Committee knew that they would happen. The Committee knew that there were deals in the pipeline that would be approved irregularly. The Committee was here today as a result of that. Perhaps some were removed because they refused to be accomplices in wrongdoing. What was occupying the media today was that the predecessors of the current incumbents had been seized with this deal. They did not attempt to approve it. That was why there was no hullabaloo. This incumbent had allowed these processes to unfold to be where they were today. The country was watching. The Committee wanted to understand how the board had arrived at this particular point. She had noted question arising from the CEO media briefing. Today would be an opportune time for the Committee to raise those questions. Perhaps other Members of Parliament had also noted questions. She had refused to interact with the media who had called her to find out the stance of the Committee. She had not wanted to make a prognosis out of this hullabaloo. Today the Committee would be able to interact. She was happy that the communicators who had been calling Members were present so that they got it from the horse’s mouth as to what had transpired. They would hear the decision of this Committee and what would have to be implemented by SAT. The Committee would allow the SAT executives to make the presentation. The board came to the meeting ready to be sent packing by the Committee. That would not happen today; the board would account today. The Committee would allow the Acting CEO, Mr Khumalo to present. The Chairperson invited the SAT board chair to greet the Committee. The Committee was lenient today.
SA Tourism Board introduction
Dr Thozamile Botha, SAT Board Chairperson, greeted the Members. He had received a letter of appointment on Saturday to go to this meeting to discuss the issues that would be raised here. The Committee Secretary had his letter of appointment. He was more than happy to have that letter read out if the Chairperson permitted. He thanked the Committee for allowing the board to listen. It would listen and would not respond to some of the questions that the Committee raised because it did not have the answers. It was the Minister that appointed and it was the Minister that dismissed.
The Chairperson addressed Mr Khumalo and advised him to drink water as he looked drowsy. She handed over to him to make the presentation.
SA Tourism briefing on English Premier League Soccer Club sponsorship deal
Mr Themba Khumalo, SAT Acting CEO, apologised unreservedly to the Committee and the South African public for coming across in a manner that was arrogant and over self-confident at that press briefing. It was motivated by the fact that he was under personal attack in social media. He under pressure at that moment. He apologised for his conduct and asked for forgiveness. There were three sections to the presentation. The first section dealt with the strategic rationale. He would then discuss how SAT had looked into that opportunity and the potential return on investment should the project go ahead. Finally, there were questions in the public domain that he would address.
For the last two years, South Africa’s tourism sector has been severely and negatively impacted due to the COVID 19 global pandemic. SA Tourism’s ability to communicate and create demand for leisure and business events has been impacted. For SA Tourism to break through the noise and reclaim South Africa's position in the global travel community, it would need a step change growth strategy and a series of big strategic and specific actions to reassert our position above pre-pandemic performance measures.
To this end, SA Tourism has engaged with the EPL club, Tottenham Hotspur Football Club, to be a tier one partner of London’s most valuable football brand and the eighth most valuable football brand worldwide. It must be noted that some SAT board members, including South Africa’s High Commissioner in the UK have been on a tour at the Tottenham Hotspur Stadium to assess and verify the feasibility of this proposed venture.
THFC has strong links to South Africa with some of our best talent having donned the team’s colours such as Bennie McCarthy, Mbulelo Mabizela, Steven Pienaar and Bongani Khumalo. THFC also has four official supporter clubs in South Africa. The English Premier League is the most watched league in the world with a total audience of 3.8 billion fans and a fan base of 767 million across 69 markets.
With THFC, we have an opportunity to pitch for a partnership deal that will see SA Tourism become the official Tourism Partner and sleeve partner to THFC. This will come with a variety of rights afforded to us.
Specifics of proposed deal
Three-year deal commencing at the start of the 2023/24 EPL season and terminating at the end of the 2025/26 EPL season.
The deal will be structured as a media deal with main deliverables of the partnership around broadcast, digital and social media. A partnership with THFC will deliver £270 Million (ZAR 5.6 billion) of total media value across the term.
In exchange for the investment, THFC will deliver partnership value to SA Tourism in various categories.
Year 1: 01 July 2023 – 30 June 2024, with an investment of £6.5 million.
Year 2: 01 July 2024 – 30 June 2025, with an investment of £18 million.
Year 3: 01 July 2025 – 30 June 2026 with an investment of £18 million.
The total cost would be £42.5 million.
Mr Khumalo said that he wished to address the questions that were in the public domain. The first issue was if there was an agent or agency involved as part of brokering this deal. He went on record saying that there was no agent. The deal was directly between SAT and THFC.
The Chairperson interjected that the Committee would not allow a situation where Mr Khumalo would be a spin doctor of certain things that were in the media. Where was Mr Johan van der Walt?
Mr Khumalo responded that Mr van der Walt was here. He was outside the room but was present on the premises and was able to make himself available.
The Chairperson asked why was Mr van der Walt not in the room.
Mr Khumalo replied that he had had a conversation with the SAT board chairperson prior to the commencement of the meeting. They had taken the view that because some of the issues raised about this deal pertained to Mr van der Walt personally, he should be present to answer any questions but that he should not be in the room at this time.
The Chairperson asked on whose authority.
Mr Khumalo replied that it was a position that they took. He apologised if they took the wrong view.
The Chairperson said that next time decisions should not be taken on behalf of the Committee. When the Committee invited SAT to a meeting, it invited the entire component. SAT dare not do that again.
Mr Khumalo apologised. One of his team members had gone out to find Mr van der Walt.
The Chairperson asked while that was being sorted out, for those SAT board members present at this meeting who had approved THFC to raise their hands. [It was five members].
The Chairperson said Members were now clear who the people were who had to account in this meeting. She addressed Mr van der Walt saying the Committee did not understand why he had not been in the room. It had been explained to Members and they found it very out of order. In this meeting, Mr van der Walt was expected to account. When he was in a Parliament meeting, he could be prosecuted for whatever lies he uttered. It was important that she made that point so that everyone was on the same page. The Committee had received a presentation from the Acting CEO. Members were ready to interact with the report. She was not sure if she welcomed that report; she felt it difficult to welcome the report. The CEO made this presentation and referenced that part of what SAT was trying to do with this particular deal was to inspire South Africans and people in the villages. She was bothered by that statement. Not long ago she had seen that people in one village in South Africa had to cross a river in a locked drum to get medical attention, go to school, or go to town to buy groceries. It was very inhumane. How does SAT inspire such villages?
She noted the stakeholders that were part of this deal. No mention was made of the South African Football Association (SAFA). That was problematic. If it was not a match or leveraging on aggregated audiences of the English Premier League, there was the South African Premier League here. Were the people of Tottenham Hotspur going to arrive in this country and loiter around the streets of South Africa taking selfies? Or were they expected to be at the Green Point Stadium and FNB Stadium to play matches, and the questions arises with whom? Which teams if SAFA was not a stakeholder in this particular deal? She heard the CEO saying that the money for tourism had nothing to do with a country riddled with potholes, electricity, water drought, and everything else that was affecting the people. How did one then market such a country abroad? What was the role of Brand South Africa in the midst of this? How was this deal going to benefit South Africa’s own players? South Africa had players who were dreaming to be international football players one day. How was it going to benefit those youngsters? There was a whole lot wrong about the deal. Members really needed to focus on the question posed on page 46 – whether to go on or not go on with this deal? In her view, this deal needed to be cancelled. It was not beneficial to South Africans and to society, let alone those aspiring young players who were in professional football in the country. It was not there; it was not visible. The Committee needed to take a stand on this particular matter. The Chairperson asked Mr van der Walt what his direct or indirect role was in this deal. He needed to tell the Committee. Before she allowed Committee members to raise their questions, she wanted Mr van der Walt to respond to her question. What was his role in this deal?
Mr Johan van der Walt, SA Tourism Interim CFO, replied that there were a lot of aspects to this matter that was not in the public domain. It was important for him to address all of those.
On his appointment, Mr van der Walt said that he was phoned late in December by the SAT recruitment agency. He was asked if he was happy to submit his CV for an interview. He had been in the private sector for the last 10 years since leaving SAT. He had previously been at SAT from 2002 until 2013. He believed he had done a decent job then. He had managed to lead the organisation to 12 consecutive unqualified audits. Ten of those were completely clean audits.
The Chairperson said that the Committee did not want Mr van der Walt’s biography and asked him to go straight to the question. What was the role of Mr van der Walt in this deal, whether direct or indirect?
Mr van der Walt discussed his role in the deal. There were three aspects to procurement. Firstly, there needed to be funds available. Secondly, it needed to fit within the KPIs of the organisation or there must be ROI. Thirdly, the deal needed to be structured in such a way that it strictly complied with the PFMA and Treasury regulations. His role was particularly around the second aspect, making sure that there was sufficient budget for this deal over the MTEF period, which was the maximum period that the public entity could contract for. His role was also to ensure that the deal was structured in a way that it would be compliant as per PFMA and Treasury regulations. His role was particularly around those two aspects. He believed that the deal, if it should go ahead, could be structured in such a way that it would be compliant. The board also approved it on that condition. He specifically mentioned SCM03 of 2021/22 of National Treasury, which stated that such a procurement – outside the normal procurement process – must be submitted to the Auditor-General and National Treasury for approval in terms of process duly followed.
The Chairperson asked Mr van der Walt about his relationship with the WWP Group, which was said to be the middleperson.
Mr van der Walt replied that when he left SAT he bought himself into two companies. These companies became WWP Events and WWP Studios. These companies predate the company named WWP Group (Pty) Ltd. This company was started around 2018, when a shelf company was renamed. It was specifically structured to be a level one BEE advertising agency focusing on below the line activities. Given that he was a business partner of that company that was about to be registered and start to operate, he was asked to assist them in setting up the company. He had to ensure that it had sufficient financing in place so that it could operate. They were particularly concerned that it was very difficult for a level one BEE entity company to economically survive in South Africa. All the boxes had to be ticked in terms of compliance, making sure it was tax compliant so that it could operate. He assisted them with it. He was proud of the role he played in that.
The Chairperson said that she did not want to pre-empt other Members but she was tempted to ask one last question after his response. Seeing that there was a conflict of interest on his side, she asked him when he wished to tender his resignation as the Interim CFO of SAT. His occupying that particular position did not bear fruit for this entity. She would not mind if he submitted it in the meeting.
Mr van der Walt replied that it was important to mention around conflict of interest that he had duly declared all of his interest in every single legal entity in which he owned shares or held a directorship since he left SAT in 2013. He had no direct financial interest nor did he hold a directorship at the WWP Group (Pty) Ltd company. That particular company was appointed in 2020 by SAT following a tender process. He was not involved in that organization except on a consulting basis. When he was approached to assist, it was strictly in line with the power of attorney or delegation granted to him.
The Chairperson said that she was sure the Members had picked up the contradictions. She allowed the Members to ask questions.
Ms Makhubela-Mashele said that she did not want to go into the finer details of the very controversial proposed deal. She went straight to the question of whether to continue or not to continue. She recommended that the Committee put this proposed deal in abeyance for now. As she listened to the SAT leadership trying to navigate on how the deal should forge ahead, she saw an entity that wanted to operate in isolation to the real conditions that South Africa found itself in as a country. SAT wanted to operate in a cloud that was farfetched from what the environment was. That was coming from the Acting CEO's words. Mr Khumalo said that the proposed R1 billion was money that was going to be used anyway, if South Africans wanted an explanation for it. It was money that would be taken to the international market to market South Africa, whether there were returns or not. It was money that SAT would use. It was not new money; it was money that was there anyway and money that would be used. She wanted the SAT board to facilitate and fast-track the process of appointing a permanent CEO in SAT. The Acting CEO's choice of words left much to be desired. She had listened carefully to his interactions with the Committee and with the public. Perhaps this talked to the point that in these people in acting capacities were put into these positions and they acted because they knew they would not be appointed. They created instabilities, purposely so at times. She did not want a situation where the CEO looked at the public purse and said that it was money out there. Hence, this sponsorship was put forward so that the money could be used any way. Over the weekend was the Kaizer Chiefs match. In her area, five minutes into the match the lights went off. The people wanted to watch Chiefs but everyone was plunged into darkness. Spectators and fans could not watch their favourite team. A proposal of that amount could not be talked about in isolation of the material conditions in South Africa. Her point was to the board and how it needed to operate moving forward. Her proposal was linked to the policy target of bringing a certain number of tourists into the country by 2030. This bold policy target was unrealistic and the SAT board should revise the target downwards to allow for proper planning as SAT moved forward. The current conditions were due to Covid when tourism was hit the hardest. The 2030 target was unrealistic. There was no Covid when this target was made and it needed to be revised downwards. Perhaps it would then allow SAT to think properly and not make such bold proposals simply because it wanted to meet this target. This Committee was an oversight committee into the work of the Department and SAT. At times the way the oversight was structured was as if the Committee was in a Tottenham Hotspur. Match. The Committee watched while SAT did its work and then it came in only in the aftermath and point out everything that was wrong. At that point SAT was done already. SAT had given the Committee the dates. It was at an advanced stage. She suggested that the deal be put on hold.
The Committee needed to put recommendations forward about the board. She found it very strange that last week three board members resigned out of the blue. The Minister filled these three board vacancies giving Dr Botha a board appointment letter without following due process. She strongly recommended that the Committee write to the Speaker indicating that its oversight model did not allow the Committee to stop such processes and the Minister was abusing her powers. She was informed that the appointees were not even part of the initial candidate shortlist of the initial board. The Minister had handpicked people to serve on the board. She proposed that a recommendation be put to the Speaker to speedily ensure that due process is followed. She was not saying that people should not be appointment but due process should be followed. She was bound by the recommendations of the Committee.
Ms H Ismail (DA) noted the CEO said that 1% of viewers would be converted. How did he arrive at that number? If the 1% was converted at the mentioned R88 billion – that equated to 8700% ROI generated. Did SAT realise how absurd a claim of 8700% ROI is? Was this not very farfetched? The presentation said a lot with a lot of numbers that looked good on paper. Was this project actually approved by Treasury? According to social media articles, at least three SAT officials resigned. She asked why they resigned. What were the reasons? Could the Committee get the meeting minutes where the board approved the Tottenham Hotspur deal with the meeting register? Nowhere in the presentation did it mention a relationship or coordination with SAFA. Why?
Mr April said that Mr Khumalo’s apology was accepted. The only problem was that Mr Khumalo should have apologised when he felt he had made a mistake towards South Africans. He needed to go to that same platform and apologise to South Africans. What SAT was selling sounded workable. An investment that comes into the country sounded wonderful. That was what the country needed. That was what tourism was there for. However, he was concerned that there was not enough research to suggest that the dream that SAT was selling for R1 billion would actually mean anything for South Africans. He believed that the price was much too high for where South Africa found itself as a country. There was unemployment and all these other things. He did not think that the 1 to 88 dream that SAT was selling to the Committee would work. He was particularly worried that Mr van der Walt had been appointed in December 2022. He was appointed out of the blue without an application of any sort. He was headhunted; Mr van der Walt did not talk about any application that he had filled in to be part of SAT. After he was headhunted there was a steamroller that happened between December and 31 January 2023 – with an approval of R1 billion of South African’s money to be spent on an English football club. Something was wrong. He had never seen a government process work like that. Something was wrong somewhere. Somebody was lying somewhere. He knew the process of government. People always complained about the red tape in government. What did the SAT talk about while overseas? What were they promised? Were they promised benefits from the R300 million per year? He was displeased with the way the board members had conducted themselves. The board members had a fiduciary responsibility to look out for the best interests of the entity and of the country at large. The Committee had an oversight role. Oversight meant that the Committee would follow the money. The money was going to a wrong place. Without a shadow of a doubt, he would reject this decision and never agree to it.
A Member of Parliament [name unannounced] said that one had to appreciate the presentation by the CEO. Members were happy with the statistics. He was worried about the behaviour of the CEO. When the CEO started his presentation he apologised. At the same time the CEO said that whether the project proceeded or not, that the money was already there. Why did the CEO apologise for something that he had already taken a decision on? If that was the decision of the board then it was wrong. SAT had had irregular expenditure worth R4.47 million and now they wanted to use R1 billion for the football club. What did that say to South Africans? The country had a challenge where people were struggling to get food, but SAT wanted to use R1 billion for the football club? The South African people were suffering from load shedding. School infrastructure was very bad, but SAT was saying it wanted to sponsor the football club. He was trying to check the justification for this agreement. He noted page 47 of the presentation stated the cost of go or no-go. What does that say to the Committee? The Committee was not fools. Members were in Parliament to represent the poorest of the poor. The Committee could not allow this agreement to continue. When did SAT inform the Minister? Where was the Minister when all of this was happening? When did they engage with the Department of Tourism? What was the input of the Department?
Mr De Freitas said that Committee process was for Members to receive the presentation document at least the day before. Members got this new information this morning. He would have loved to have received the report beforehand. Much had been said about money already being there – that would be spent anyway. That was a point. His argument was that it did not need to be spent in this manner. Based on the presentation, South Africa would get a return on investment of 8700%. He had looked at real information that was not ‘guesstimated’. The World Cup, which was the biggest sports event in the world. It beat the Olympics and any other sports event. The 2010 World Cup in South Africa generated R3.6 billion in tourism with about another R1 billion afterwards. It was a total of just under R5 billion. This was for the biggest-exposure sports event, on which South Africa did not have to spend that much as it was an international worldwide event. That was putting it in context. He asked how this figure was arrived at? It was a great presentation to motivate for a soccer team and not for tourism. The point kept on being made that there would be so much exposure. Nowhere was there talk about how this would be converted into tourism. That was very interesting as there was no scientific basis on how this was being achieved. Page 5 spoke about how there were barriers. South Africa was an easy sell. Everyone wanted to come here. SAT just had to tell people about it. South Africa had the culture. It had the landscape. It had the food. It had everything going for it. It was not like Rwanda who had come out of a civil war and genocide and had to change people’s perception of it. People loved South Africa; it was an easy sell. The perception barriers were invariably safety and security, value for money, visa regimes, direct flights – which were the barriers that government should be dealing with. If government dealt with these then South Africa would increase its tourism. As a Committee member, he had visited various tourism sites throughout the country. The overwhelming problem in many provinces was that a tourist site existed and was one upon a time beautiful but had been left to rack and ruin. The tourist sites were dilapidated and not accessible. There were beautiful sites that any American, English or any European would love to go and see. He was not talking about sites in fancy built up areas. He was talking about rural where there was an opportunity for poor people to advance in tourism but they were unable to because there was no road to get to the site. Or it had been so dilapidated and left unmaintained that it was not attractive anymore. That was where the money should be pumped into. Tourists were crying out for that. They did not only want to go to Cape Town and the wine farms, Durban or Joburg. They wanted new experiences. The new trend in the modern world was about experiences. SAT was not providing enough of that. He still did not see the correlation of how the THFC was going to help the country. Safety and security, value for money, the visa regime – These were what should be focused on.
The presentation spoke about classic media and how that needed to be leveraged. That by doing that it would bring in tourism. He had not see how that was proven. Later on it speaks about local events. The use of Brand South Africa, the sports federations – that was what should be focused on. He did not understand how a foreign team in South Africa, visiting and playing matches in South Africa, was going to enhance tourism? It was certainly not going to bring in 8700%. He was very disappointed to read in the presentation about Disney Africa. It was so un-African. South Africa should be enhancing what it had. South Africa had so much to offer. It did not need Disney. South Africa had so much going for it of its own culture and environment. On page 7 SAT spoke about how tourism was growing steadily. It was true that tourism dramatically dropped due to Covid; it was an international problem. However, even without the help of a soccer team or a big one-hit-wonder, tourism in South Africa was still growing. This was SAT’s own admission on page 7 which he had not crosschecked because the information arrived only this morning. It had grown from 3.2% to 4.3% within a year. That was without paying a soccer team. Page 9 compared South Africa to various countries. Canada was specifically highlighted. He wanted to mention Canada because they had an excellent tourist strategy. It involved enhancing its tourist sites, making sure that the infrastructure was right, that it spoke to the right markets; that their stuff at home worked. He had researched that. Canada had not sought out one big thing to suddenly answer everything. This was a country that was most of the time under snow, cold and miserable. He was sure South Africans were much friendlier than Canadians, but yet people were flocking because Canada was doing the basics. Australia was also mentioned. If one dissected Australia, one would find that the state of Queensland was bringing up Australia’s numbers. They had an excellent strategy, similar to what Canada was doing. This presentation was reinforcing why South Africa should be doing the basics. The presentation kept on mentioning the exposure to half the planet as if that was going to translate into tourism. That was not necessarily the case. It just meant that people would see a name ‘South Africa’. Only 11% of Americans, if they were shown a world map, could point to where South Africa is. Whose fault was that? Not just Americans, it was South Africa’s. South Africa needed to inform them, but it could not do that if there was no basic infrastructure. Just because people supported a soccer team did not mean that they would be supporting a country. He noted the example of Rwanda that was given. What was unsaid so far in the public arena was that after the war, that government ensured that it became the cleanest country in the world. It was dealing with corruption. It was making sure that its tourist sites were accessible, interesting and attractive to tourists. They were doing the basics. Investing in a soccer team only came in much later when one had done one's homework. He felt that page 46 was condescending. It was not appropriate to say that if the Committee did not agree with SAT, then SAT was only a small player that could not do big deals. Of course, South Africa could do big deals. This deal was just not appropriate. 2010 at the time was appropriate; it was the right time. This deal was not appropriate within the environment of load shedding which impacted on tourism. Potholes impacted on tourism. How was one supposed to access a traditional Ndebele village when one could not even get to it in the first place? The opportunity to Airbnb a room out was not there for them because the tourists could not reach those sites in the first place. He was therefore quite taken aback by that comment in the presentation. He was sure that it was not meant that way, but that was how it came across.
On page 47, he noted the timeframe. Within a month of proposing this to the board, everyone went off to London. All of these things happened within a month. Nowhere did he see consultation with or at least advising the Minister. There was no consultation with Treasury. It was very irregular. If this matter had not come out in the Daily Maverick, would the deal have been signed, sealed and included in the State of the Nation speech?
It was mentioned how the SAT board was going to go on a witch hunt to find the whistleblower. There was legislation in the country to encourage people to bring forward information. It was important that whistleblowers who wished to provide information felt protected. To vilify and intimidate a whistleblower was concerning such as when the CEO said that it was un-South African to provide this information. If it was incorrect information then that would be part of an investigation that would be launched.
Mr De Freitas asked if Mr van der Walt was saying unequivocally that he was not a director of any WWP companies or affiliates, present or in the past? If this deal were to go ahead and these projected targets did not materialise, what then? Did SAT leadership and the board just walk away and say, ‘oh well, we were wrong’? Would they just say that they spent R1 billion but that they projected incorrectly? What then? If they were correct then that was wonderful as tourism would grow 8700%. But what if it was not correct?
Ms S Boshoff (DA, Mpumalanga) said that the majority of Members were on the same page. The question that should be asked was, why was this document leaked? Something untoward was there otherwise the whistleblower would not have leaked it. Members would like to know what was discussed at that board meeting. Why was it so cloak and dagger? Why was the public not informed about it prior to a decision being made? SAT could not carry on this way where taxpayer money was spent. She agreed that whistleblowers needed to be protected. Mr Khumalo made the remark that the whistleblower must be isolated. Why must they be isolated? What did he want to do with the whistleblower? It was not appropriate to speak like that. Mr Khumalo had said that it was un-South African. What was South African then? Should whistleblowers not exist? Whistleblowers should be protected. R1 billion was being spent on something without public participation. She took exception to page 46. SAT was playing a game. What gave Mr Khumalo the right to say to the rest of South Africa that SAT could not do big deals? What was the expenditure for the London trip for five SAT board members?
Ms Gomba asked for the number of board members and the number to form a quorum for consensus. When the Chairperson asked who was involved when the deal was discussed and agreed on, only five hands were raised. Many were not in the meeting as there were no flights available. Was Ms Pretty Ntombela still a board member or was she dismissed? She wanted a straight answer. The board needed to be transparent about its members. At some stage others were prevented from coming to the Committee as perhaps they were not invited to come. She noted Mr van der Walt was asked to excuse himself from the meeting. She heard the CEO say that this was not new money being spent. Was this money budgeted for and for which financial year and under which vote? She echoed the Chairperson if SAFA was engaged as it would be very interested to know about this relationship. Were there bilateral discussions with the Department of Sports, Arts and Culture on this matter? She was not sure if the Committee could request the SAT board minutes or report that referred to the THFC proposal discussion and agreement. When was the proposal brought to the board by the CEO? He mentioned he had an evening meeting on 31 January. The document that was leaked did not contain the agreement or consensus.
Ms Gomba noted the infrastructure challenges of the tourist destinations facing the country. In December she had listened to the SABC talking about the good returns to South Africa’s game reserves. A number of visitors came and it was very exciting. Unfortunately, the infrastructure was very, very weak. There was no water pressure for the ablution blocks. People could not appropriately use the ablution blocks because of the influx of people that went to those game reserves. She was worried about the amount of money that would be spent on an international soccer team when there were challenges in South Africa. South African tourist destinations needed to be developed to cater for the number of people that would be coming. SAT was busy inviting more people when the country's own infrastructure needed to be fixed so that it was able to cater for the number of people envisaged to visit the country.
Ms Gomba asked if there was a middleman involved in the deal. If there was a middleman, then who was the middleman? She asked if the CFO was appoint appropriately? Was he permanent? Was he already appointed? She asked if due process was followed for him to be appointed? Was he appointed as the CFO to ensure that the deal was done and people were paid? It was very important to know how Mr van der Walt became the SAT CFO. Did Mr van der Walt apply like everybody else? How many people applied?
Noting the tourism mandate, Ms Gomba said that the Committee wanted to see villages, townships and small dorpies being part of tourism, as this was where most of the population resided. Those people were struggling. They had no jobs and there were no activities happening there. Money that was supposed to assist this programme was being taken to other programmes that the Committee was not even briefed on. Was the Minister told about this? Was the Deputy Minister told about this? Was the Director-General told about this? Was the Committee briefed on this? Or was the Committee just supposed to approve the budget? She was worried about that. She did not support this initiative.
Ms Mpushe agreed that the deal must be cancelled. There must be further investigation of the deal. On the appointment of Mr van der Walt, the Committee did not know the conditions which led to him to leave SAT before. Now he was being brought back. He was very clear in his assertion that he was only brought back to ensure that this deal was compliant with the law, nothing else. The investigation should be instituted. The arrogance displayed by the Acting CEO left much to be desired – stating that it would be mediocre for the Committee not to let this big deal continue. That if the big deal did not go through, they would continue spending money on the smaller programmes within the Department. The money would be spent anyway, even if it was on smaller things. She warned Mr Khumalo not to taint his reputation with the happenings of the SAT board. This board did not take seriously South Africa's transformation agenda. Did Mr Khumalo understand the historical background of South Africa let alone its current economic status? The CEO was undermining the Committee.
Ms Gomba discussed the board composition. Dr Mhlongo had been the deputy board chairperson and now he was an ordinary member. Was it the chairperson who convened the meetings, or the CEO? Or was it the Minister? When all of this took place, it was taxpayers' money at the end of the day. The cancellation was informed by the fact that the entity had not taken any effective, efficient and appropriate steps on this deal. The Department of Sports, Arts and Culture was not taken on board either.
Did this process form part of the SAT corporate plan submitted to Treasury? Were there projects that would be affected by the deviation for the financial year and the MTEF? Tourism products had not been developed; destinations were mostly dominated by white-owned products. When tourists were brought to South Africa, the only products that were five or four stars were white owned. The people would not be benefiting from this. A feasibility study should have been done first for a budget to improve tourism products. SAT should improve the state of the current tourism products and ensured that there was transformation. The Committee’s priority was on the development of products from townships and villages. SAT remained the biggest contributor to irregular expenditure, accounting for 79% or R45.13 million in 2021/22 for SCM noncompliance. This was due to lack of preventative controls. She was sure that there had been no improvement amid this deal. There was leadership instability in SAT. The Auditor-General recommendation resulted in a moratorium on all joint marketing agreements entered into by SAT. This related to the audit finding on lack of monitoring of deliverables by third parties. Had the moratorium been lifted by AGSA? She believed that there was serious thuggery at play. At no stage should it be allowed for someone to be appointed over the phone. She referred to the marketing deal in Dubai, which led to the Acting CEO getting married there. Maybe he was going to get a second wife in London.
Ms Maneli responded to the question put to the Committee on whether it was go or no-go. She supported that the deal should not go ahead. The Committee could not be emotionally blackmailed to agree to wrong things. As much as South Africa needed big deals which the Committee appreciated, they needed to come via the right procedure. The Committee was here performing oversight. South Africans were relying on the Committee and it could not fail South Africans.
Ms Maneli had a direct question for the CFO. Upon Mr van der Walt being handpicked, did he declare his other financial interests? Was there anything that he did not declare; was he ever on step-aside; was there any form of suspension? What was his status now; was he still in charge? There was a reason he was placed outside the Committee meeting room.
Ms Maneli asked what was in that leaked document that was not in the authentic document. The CEO presentation stated that SAT was accused of not having the capacity to market tourism. Inasmuch as the Committee wanted SAT to market tourism, there needed to be meaningful programmes that would have a positive impact on society. South Africa could not be marketed and then be brought into disrepute. The Committee still wanted marketing but it wanted it correctly. The best marketing agent was a satisfied customer. How was SAT going to ensure that tourists left South Africa happy? South Africa had infrastructure challenges and domestic issues that needed to be dealt with so when international tourists visited, they left with a positive image of South Africa. That would contribute more to further investment and marketing South Africa positively. At what stage of the deal was the Minister informed? That was another matter that the Committee needed to follow up. AGSA had raised concerns about leadership stability and governance in SAT. Should that not have been the board’s first order of business and focus before considering a financial obligation of this magnitude? The board was not properly introduced. The first thing the Committee got to know about the board was the Tottenham Hotspur deal while there were other challenges that needed the attention of the board. She did not want to get into the attitude of the Acting CEO. Members had discussed that at length. There was an outcry not only from the general public, but also various voices from the local tourism value chain. They had dubbed the decision as deaf to local industry needs. Could SAT advise how it would engage with such stakeholders so that it could regain public trust?
Ms Xego appreciated what was raised by Members in response to the presentation by the Acting CEO. She acknowledged the importance of the South African media. Without the media publishing the document, the Committee would not be here. She also appreciated the leadership of the Chairperson for calling the meeting. The absence of the Department's political leadership brought down the board's confidence. It should be the political head that introduced Dr Botha as the board chairperson so that when the board presented and spoke, they were confident. In the Committee’s previous engagements with the SAT board, the plea the Committee made was for it to appoint a CEO. The Committee could not be comfortable agreeing to proposals that SAT made, without it having permanently-employed people in strategic positions such as the CEO and CFO. Those were key people in this entity.
Ms Xego had listened to the CEO's media briefing and was astonished when he said that the Minister knew nothing about the deal. The presentation stated that the role of the board was to advise the Minister on deals like this one. He said that the Minister knew nothing about the deal and that was a great concern.
Would there be value for money in this sponsorship? What had been the plan prior to the sponsorship deal? During the state of disaster period, departments and entities had presented their turnaround plans to Parliament. Was this sponsorship part of its plan? What process was followed? She thought that it was risky for the Committee to commit this proposal to the Seventh Parliament as this deal started in 2023 and ended in 2025. It was a bit risky when SAT did not have permanently employed people and the chop and change to the board was also a risk. The office of the board chairperson was a problem; it meant that there was something wrong. A person leaking documents was also an indicator that there was a problem. It may be people who were not satisfied with the decision taken. They decided because they were not being heard in the board that they would leak the document. The Acting CEO said in the media briefing that the board gave the green light to the deal. What had already been done since the green light was given by the board? If the Committee stopped this deal, what would be the impact in financial, budgeting and planning terms? She was in agreement that this deal must be cancelled. It was a good proposal but the wrong timing. The absence of the political leadership to account before the Committee was another reason for her to say that. The instability that the Committee observed in the board was a contributing factor. The chop and change in the board portfolios was a contributing factor. People who were acting in key positions was a contributing factor. Amongst the three board members who had resigned, were any heading a board committee facilitating this deal? The whole deal needed an investigation and seconded the Member who said an investigation was needed. She appealed to the board to prioritise having permanent people in key positions to start stabilising SAT. She knew that people liked working 24 hours but it made her think when a person was sent a letter of appointment over the weekend or after hours. South Africans needed to be recruited in the correct manner.
Ms Mpushe said that in previous SAT reports, it stated that it would be paying special focus to three priority markets: Nigeria, China and India. The Committee did not know what had shifted the focus from these growth markets. She thanked the whistleblower. She had gone onto Google and seen that the Acting CFO was listed as a director. He had shared with the Committee that he had not had a directorship in that group of companies.
The Chairperson hoped that the CEO had noted everything that was raised by Members. The problem with South Africa today was that people with the wrong skills were assigned to positions. It then became a nightmare that affected the whole country. Eskom, the largest producer of electricity on the continent, had had a lawyer as CEO. This was a problem. The SAT Acting CEO and Interim CFO had been headhunted and had no financial skills. The Committee was sitting with this problem today that had engulfed the entities in the country. The Committee had expressed itself on the instability and expediting the filling of critical vacancies such as the CEO and CFO. It had made the point that the advertisement should be internal. However, that advertisement was started externally. What were the reasons for this? Did SAT not have capacity inside? There was the problem of an Interim CFO with no expertise in that position. Mr van der Walt was appointed when this whole project kicked off, with only seven months' responsibility. It was very convenient. That was why Mr van der Walt must go. The Committee wanted his resignation today. Otherwise the Committee would be failing the country. The Committee could not be accomplices to such failures. The Acting CEO raised the point that SAT had nine offices around the world. He failed to raise that within those nine, one was the biggest contributor to the irregular expenditure as cited in the Auditor-General report. There were a lot of wrongs and challenges.
The Chairperson asked the board members present when this deal was tabled at a board meeting if the board had the National Tourism Visitor Information System so it was able to mitigate around the figures that had been tabled in the meeting presentation. These were the very same figures that were disputed publicly by the Tourism Business Council after the SAT press briefing. Mr Khumalo and Mr van der Walt would respond to the questions directed to them. She hoped that Mr van der Walt would tender his resignation before the meeting was adjourned.
SA Tourism management response
Mr Khumalo asked Mr van der Walt to respond to the questions directed to him first. He would then come in and address the rest of the questions.
Mr van der Walt replied that the SAT board had conditionally approved this deal around 11 o’clock on 31 January. It was subject to a number of conditions Firstly, it had to comply with the Treasury SCM Instruction 3 of 2021/22 which stated that the proposed deal must go to the Auditor-General and Treasury. They would confirm if they were happy or not with the governance process followed. There were also other conditions. For example, the negotiation of possible exit clauses in the case of sudden foreign currency movements or should the SAT budget be suddenly reduced or a matter similar to those. If that approval was forthcoming from the Auditor-General and Treasury, and the exit clauses could be negotiated with the other party, then the transaction would have proceeded.
Mr van der Walt replied that in 2013 when he left SAT, he bought into two companies. He bought into WWP Events, which had a 2002 registration number, and WWP Studios, which had a 2004 registration number. He was a member or director of these two companies. He was not a director of WWP Group (Pty) Ltd., which was started as a BEE level one advertising agency around 2018/19.
Mr van der Walt replied that there was nothing like a middleman or facilitation fee in this transaction. What was proposed by the other party was a transaction for £44 million, covering the period from now until 1 July 2023 because SAT, like any other public entity, could only commit to a three-year contract in line with the MTEF allocation letter. The expenses for these five months must be funded by the other party. As SAT could not legally go into a transaction like that, it had to procure those services separately in another contract. That would have to be negotiated with another party. Hence, the suggestion that it be done with SAT’s already appointed agency since 2020.
His seven-month SAT Interim CFO contract was offered purely on the basis that the audit process of a public entity concludes at the end of July every year, once the Auditor-General provided the audit report. 31 May was the deadline for the provision of annual financial statements to the Auditor-General. In this case the 2022/23 annual financial statements would have been completed by the Auditor-General by the end of July and the audit report granted. It also provided time for the new CEO to be appointed, who obviously needed to be part of the interview process for the CFO. Hence, the suggestion that it should be for seven months only. He responded to the suggestion that he should step aside saying that he had done his utmost to declare everything upfront. He had completed the declarations in line with SAT’s corporate governance policy. He completed the correct templates. He had not hidden anything whatsoever. He challenged anybody, if he had hidden anything then it should be exposed. He would not have done the declarations if he had things to hide. SAT would not have portrayed the deal in the board presentation, in that way if it had something to hide. Normally facilitation fees or bribes or things like that were hidden in the figures. One would not be upfront about disclosing that in presentations. As for his skills, he was a chartered accountant with a masters degree cum laude in financial management.
The Chairperson said that was impressive. She said Mr van der Walt did not touch on the issue he had raised earlier, which had been self contradictory in the statement. He had said that he was no longer involved in those businesses except on a consulting basis. What did he mean by that?
Mr van der Walt replied in respect of WWP Group, he was not involved whatsoever in that legal entity. He had until December 2022 done consulting for them from time to time, particularly around taxation.
The Chairperson asked if he understood what he was saying?
Mr van der Walt replied that he did understand.
The Chairperson said that she doubted it. She asked Mr Khumalo to respond to questions directed to him.
Mr Khumalo said that he would respond to the questions raised as best he could. Some of the questions would be more responded to by the board. The Acting Chief Strategy Officer would respond to questions on the numbers. The board approval process of the project was done. The board resolution from the evening of 31 January stated, ‘The board resolved that the entering and signing of the partnership deal between SAT and Tottenham Hotspur was hereby approved subject to due consultation with the Minister of Tourism, the Department of Tourism, National Treasury, and other relevant stakeholders with respect to the envisaged partnership with Tottenham Hotspur’.
The point he was trying to make on the timeline was that that board meeting happened at 8pm on Tuesday. The story already broke between 5 and 6pm. So the conditions that the board put on the approval – which was for SAT to consult with the stakeholders – happened after the story was already in the media. This meant that SAT did not have time to execute the conditions of the approval, which was to consult with stakeholders. This included the Sports Department and SAFA. SAT could not engage unless it had a resolution allowing it to be able to do so. As management, in the process of formulating any idea, it did reach out and speak to the various colleagues. It did so on an informal basis in developing the idea. Formal instruments of engagement could only happen after the resolution had been taken. By the time the board had made that resolution, the story was already in the public domain.
The Chairperson said that in Mr Khumalo’s interaction with the media, he had made a bold statement that SAT would not go to the Department of Sports, Arts and Culture with this project. That caused a hullabaloo and the response from DSAC, SAFA and all the stakeholders. She was not sure if Mr Khumalo was spin doctoring now as he had already gone to the media and addressed the nation on this. What was Mr Khumalo trying to tell the Committee now?
Mr Khumalo replied that the reason SAT was doing this deal was not because of football but for access to the audiences of football. He made that statement in the context of clarifying that the target for this deal was the audience, instead of football itself. In the context of all the football camps built in the country and the visitation, that was a separate aspect of the deal.
His comment that the "money would be spent anyway" was unfortunate and he apologised for that. It was the go- or no-go response. When SAT did the analysis of its previous projects in its various markets around the world, those projects were all subscale, small and targeted. It was in the context of SAT saying that if it was unable to aggregate those projects and create scale then the alternative was to run the projects the way they had always been run. He did not mean that the money would be spent anyway in a condescending way. He was saying that that was how projects had been deployed in the past. What SAT was trying to do was to scale up, but in the absence of scaling-up, the operations would revert to the current way in which its projects were run.
Ms Mpushe raised a point of order. Parliament had a recording system and what he was now changing what he had said initially. Earlier, he said that the money would be used anyway, but now he was justifying his statement and changing it.
Ms Gomba raised a point of order. She did not understand as she did not think that there could be any soccer without football players.
The Chairperson said that Ms Gomba was making a point but that it was not a point of order. She asked Ms Gomba to wait for the second round of questions as it was not a point of order.
Mr Khumalo continued that he was making a clarification about the "money would be spent anyway". He was referring to the projects that were in the current Annual Performance Plan (APP), in last year’s APP and in the previous year’s APP. Those were the projects that he was referring to. When he said that the money was going to be spent anyway, he was referring to the fact that historically the money was being spent.
Mr Khumalo replied that he was not qualified to respond to the questions about the board resignations. The board should respond to that.
Mr Khumalo differentiated between the demand and supply side of the tourism sector. The demand side was where demand was created, people were brought into the country and moved around the country. It was destination marketing. SAT was the marketing entity. There was also destination management, which was managing the quality, infrastructure and product development of the sector. SAT was not responsible for that. The Department was responsible for that particular work. That was where that particular question should be directed. The dilapidation of the supply side was not SAT’s responsibility.
Mr Khumalo clarified the process that was followed for the appointment of the Interim CFO as there needed to be some clarification there. Upon the resignation of the outgoing CFO at the beginning of December 2022, the board had met and had a discussion on how to go about filling that position. There were two factors that weighed on the process to be followed. The board felt that because there was a notice period and the incumbent had been asked to leave early from the notice period. The appointment of a substantive CEO, was already underway and that process needed to be completed so by the time of recruiting for a substantive CFO, there would also be a substantive CEO in place to be part of that process. It was then decided that for a seven-month period, SAT would have an Interim CFO. This would give the board time to recruit a substantive CEO and a substantive CFO. That was why SAT went out to the market through a reputable executive search company which came up with three candidates who were interviewed. Mr van der Walt was the successful candidate. Therefore any suggestion that there was a very specific selection of Mr van der Walt outside of a competitive process needed to be put into the context of what in fact happened. There was a proper process. There were three candidates. Members of the board formed the panel. It was not the CEO that hired the CFO. There was a panel constituted of chairperson of the audit committee and the chairperson of the remuneration committee. That followed due process.
Ms Mpushe raised a point of order. Mr Khumalo said due process was followed in the appointment of the CFO as if it were the Members who insinuated that Mr van der Walt was headhunted. Mr van der Walt said himself that he had received a call to submit his CV. There was never a process that had been taken.
The Chairperson asked what was the point of order?
Ms Mpushe said that Mr Khumalo was lying under oath. There was no interview whatsoever.
Mr Khumalo recalled Mr van der Walt saying that he received a call from a headhunter and submitted his CV. He did not recall his saying that there was no process.
The Chairperson asked if being called by a headhunter was a process in his view?
Mr Khumalo replied that it was not.
The Chairperson asked what was Mr Khumalo dismissing then.
Mr Khumalo explained that he was not dismissing but contextualising there was a process. Mr van der Walt had stopped explaining at the point where he submitted his CV.
The Chairperson asked if being headhunted by an agency did define a process? If Mr Khumalo conceded that there was a process of headhunting by an agency that did not constitute a process of appointing a person, like Mr Khumalo was appointed. She asked if Mr Khumalo was appointed by an agency to act as CEO?
Mr Khumalo replied that he was not.
The Chairperson asked what he was disputing.
Mr Khumalo replied that he was not disputing anything; he was clarifying that there was a process.
The Chairperson said that there was no process to appoint the Interim CFO. That process was not done by this board but by an agency.
Mr Khumalo said that he would defer this matter to the board chairperson. There was a process of three candidates. SAT could provide the whole process of who the candidates were and when the panel sat.
The Chairperson said that Madam Minister was leaving as she felt that she should not be here because it was on the eve of the State of the Nation Address. The Chairperson was not sure what that meant. Her understanding was that executives were not supposed to have programmes on the eve of the State of the Nation. However, the Minister indicated to the Secretary that when she was needed, she would be in her office. She could be called in her office. The Chairperson said that the CEO could continue.
Mr Khumalo discussed the target markets that SAT should focus on. There was a comment that SAT had said it would focus on growth in China and India. That was still the case. However, China still remained closed to a certain extent. Both China and India did not have direct airlift into South Africa. The work SAT was doing in that space was collaboration in getting traffic out of Hong Kong into South Africa. Ethiopian Airlines also carried traffic from there. The demise of SAA flying out of Hong Kong and the planed flights out of Guangzhou would have opened up that market. There was no direct airlift there. In India, the airlift came through Kenya. If South Africa increased its effort in recovering the direct airlift, that was the work that was being done there. It was not necessarily campaign work. It was advocacy work along the value chain. The work was being done in those markets.
On how the SAT calculated the 1% audience conversion, Mr Mason would respond to that question.
Mr Khumalo explained that what the Auditor-General had pronounced was not joint marketing agreements in general. There were no joint marketing agreements occurring. Those agreements were specific to tourism channel partners. It was about tour operators being channelled to bring volume into the market. That was what AGSA was addressing.
Mr Khumalo agreed about the protection of whistleblowers. The issue he was referring to in the press briefing was the fact that the leak came from the board. That was what disturbed him personally. The only people who were privy to that document were the people around the table. How was it possible to have discussions in a board environment and have leakages inside the board? That was what disturbed him. It was not the fact that it leaked; it was the source of the leak that was concerning.
The Chairperson asked if he was certain the leak came from the board as that was a serious allegation.
Mr Khumalo replied that this was from deduction. If one was sitting in the room and only X number of people had the document then it had to be leaked from the people who had the document. It could not have come from anywhere else.
The Chairperson called the Committee members to order.
Mr Khumalo referred to how much the 2010 World Cup generated versus what a project of this kind would generate. The World Cup was six weeks. There was a lead-in and a lead-out period. This sponsorship deal was a project that would run throughout the year across a three-year period. The comparison was therefore not direct. He noted what Members had raised about a project of this scale. It was different in character from anything else that SAT had done. It did have an inherent risk built into it. It was something that would require consensus for it proceed. If that consensus did not obtain, and this was a discussion that the board had been having, then it was agreed that whatever the Committee had decided would prevail. Everyone needed to proceed together on this particular scale. That did not mean that there were no other ideas that SAT had. It did have ideas. It had alternatives of how it could grow the economy. This was just the one it believed in at this point which would have fallen into Programme 3 of the APP beginning 1 April 2023.
Mr Khumalo noted in response to whether there had been a commitment or contract signed, that no contract had been signed. He replied on whether there had been direct expenditure on this project saying that there had not been, except the efforts to get to a particular conclusion. There were no direct financial barriers, other than the work that had been done to get to this point. The role of management was to bring ideas and proposals to the board. The role of the board was to say yes or no. In the last couple of days, everything had been focused on management and himself in particular. His role was to propose to the board. The board either said yes or no. He would continue to bring in projects for long as he was allowed to do so. The board was the one who said yes or no. Once the board had said yes, on condition XYZ then that particular responsibility was shared between management and the board. He pleaded that the questions asked should be evenly distributed between management and the board. The management was not railroading the board. The board also applied it own mind and came to its own conclusions. He deferred to the board for any questions that he might have missed.
The Chairperson said that the money was appropriated by Parliament. That needed to be very clear. She told Mr Manson to spare the Committee the figures. He should not do what he did on national television. The Committee was not interested. The Committee raised straight questions; it needed straight answers. She had not heard an answer to her straight questions so far. Mr Khumalo had responded to a few questions directly. Mr Manson should spare the Committee from all the figures. The question Mr Manson needed to respond to was what was put before him by the Committee. The deal must be cancelled with immediate effect. The CFO with a conflict of interest needed to leave with immediate effect. There could be no football in South Africa involving international football clubs, without SAFA. The presentation stated that it was going to be an interactive situation with soccer. Who became the primary stakeholder involved in this whole thing? How did SAT envision interaction with soccer without SAFA? These were the questions that the Committee was pondering. There were many reasons for the Committee citing that the deal needed to end today, now. There was a lot wrong with the deal itself. There needed to be an investigation on this matter with immediate effect.
The Chairperson noted that the board members had missed an opportunity to be introduced to the Committee during the five-minute photoshoot by the Minister [who had briefly come onto the digital meeting platform]. The SAT Board needed to respond so that there was no confusion moving forward. There needed to be one understanding and one message out there. The communicators of the country were waiting for SAT to contradict itself. As Chairperson, she had been receiving invites to do interviews. If she went there she would get the opportunity for free makeup, but she was not going there. SAT was spin doctoring. SAT needed to guard against that. The Committee knew the figures. It could never be that SAT brought in international people when a German tourist had been killed in Kruger National Park in October 2022. SAT needed to be in order before it brought in people from outside the country. How far was SAT in ensuring that it promoted domestic tourism? The Committee was still waiting to receive those answers. Perhaps, the Committee would be inspired if SAT was talking about Leeds. One of South Africa’s own, in the form of Lucas Radebe, left a footprint there for the country. There were many questions around Tottenham Hotspur and how SAT had landed the decision that this was the best of the best. Subsequently, there was a TikTok of the CEO receiving a jersey of Manchester United. The CEO had been very excited about how Manchester United would bring more numbers than Tottenham Hotspur. The Manchester United following was far better than that of Tottenham Hotspur. That was what she had picked up from that TikTok. That indicated to her that there was no due diligence done before arriving at this particular decision on Tottenham Hotspur. That was why the Committee was saying that it ended today. The deal was not going to happen. There also needed to be an investigation into this. The Committee was going to instruct the Department to do an investigation.
The board also needed to respond to the comment that the money would be spent anyway. The board's funds were monies appropriated by Parliament. That gave the Committee the power and the right to write a letter to Treasury and the President to say that money that was spent willy-nilly, without benefiting South Africans, needed to be reprioritised. The Chairperson warned that that money could be reprioritised. There should be no confusion that the board was above the Committee. SAT’s presentation to this Committee needed to be carefully crafted. The authority did not lie with the board; there were powers that be. The Committee did not want figures. The figures that were given on national television were enough. The Committee wanted straight responses to the questions asked by Members. The Committee was not rushing anywhere. The Committee had the whole day to address this because it was in the best interest of this country and the people of South Africa.
Mr Robert Manson, SAT Chief Digital Transformation & Technology Officer and Acting Chief Strategy Officer, replied that he was going to respond to the ROI numbers. Since the Chairperson said that she did not want to hear about numbers, he would hand back to the CEO.
The Chairperson said that the Committee was traumatised enough by the millions that were leaving the country for no apparent reason. The Committee did not want figures. She handed over to the deputy board chairperson to comment.
SA Tourism Board response
Mr Odwa Mtati, SAT Deputy Board Chairperson, said that the board decision to management was for management to seek approval from the proper regulatory authorities. The board did not say go and sign the deal. The board said that approval needed to be sought. The board said that the deal needed to go to Treasury so that there was compliance. It said that SAT needed to go to the Minister and the Department. SAT was an agency of the Department; it was not an independent entity. The board stated that SAT needed to seek consultation with the other stakeholders. That was what the board decision said. The board understood that SAT did not operate as an island. It operated with a particular mandate, which was that of stimulating domestic demand and to try and draw people to the country. However, that was constrained by other institutions. There was no deal on the table. It was the commencement of a process to ensure that the appropriate approvals would be sought.
Mr Mtati replied about the CFO and his role, saying that when the matter was brought to the board that there was a possibility of a conflict of interest, the board wrote to him asking him to respond to the matter at hand. This needed to be done in order for the board to take a decision on if his services would continue within the entity. Part of what he had been commissioned for was to ensure that the entity did not suffer due to the sudden CFO resignation. That was what SAT wanted out of the Interim CFO. The board had appointed an executive search company to assist it with appointing the top executives, starting with the CEO. It acknowledged that it had an organization that was challenged by the lack of permanent leadership. That was the mandate for the executive search company. He would request the CEO to ensure that all board decisions be made available to the Committee. The board would provide the decisions it took and what informed those decisions. It was in the interest of the public that all board decisions were subject to public scrutiny. The board had emphasized that it was important to engage with its stakeholders because its role was limited. The board still maintained that as it dealt only with a particular section of what should be the contribution of an agency to economic development. It accepted that particular fact. This decision was taken in the context of a country that was suffering from other challenges. The board needed to recognise that as fact. It was important that stakeholders responsible for other parties were brought on board to ensure that they dealt with some of the challenges. A decision could not be taken confined to that mandate without consulting other people. That was not how an agency would be judged out in the public. People were going to say, but there was no electricity. It was important that those who responsible for that were consulted to ensure that the entire tourism community was dealt with. The board took ownership of the presentation. The board apologised for the tone that it had used. Perhaps in the overzealousness of it trying to deal with some of the issues, the board came across as if it did not want to be responsible for anything. The board drafted the presentation. The language used was deemed inappropriate and the board accepted that. The board took full responsibility for it. The obligation of the board was to improve.
The Chairperson thanked Mr Mtati for his response. She was sure that he was responding to what Ms Maneli had raised earlier on. The CFO had not responded to what was the cost of the trip. The Committee was looking forward to that response. What was the cost of the trip?
Mr van der Walt replied that he did not have the cost with him. He would find how much it had cost and share it with the Committee. It was definitely not paid by Tottenham Hotspur.
The Chairperson said that the Committee wanted the cost of the trip now. She asked if the board did not have the records? The Committee wanted the information now and not any other day. The Committee would not allow a situation where questions were responded to in writing on this specific matter. While the Committee was waiting for the figures, she would allow Members to ask a second round of questions. She thought Mr Manson would have the figures for the trip?
Ms Makhubela-Mashele suggested that while the Committee was looking at the cost implications of the UK trip, the Acting CEO should provide a timeline for the process of the deal so the Committee knew what had transpired. She did not believe that the cost implication of this deal was only flying to London simply to meet Tottenham Hotspur counterparts. If this were to be part of the investigation, she would then withdraw her request. She raised this because she had found many inconsistencies in the CEO’s responses of what had transpired. Perhaps if the Committee received it in writing, it would be of assistance so the Committee did not go back and forth with the CEO. She thought that the CEO had forgotten some of what he had said in the media and what he said today.
She said that the Committee should give timeframes to the Department for the investigative process. The report needed to be comprehensive and needed to provide the cost implications. She made a suggestion to the board for similar future proposals. The proposal itself was not bad at all. Anything that had positive spinoffs for the country should be welcomed. However, the process in soliciting such should guard against meddling and muddying the water before the final stage is reached. The TikTok of the CEO that was trending was very bad and should not be encouraged. It should be clear to the public that SAT was trying to have a cover-up, because suddenly there was Tottenham Hotspur and then there was Manchester United. It diminished the confidence towards government. South Africans generally had a trust deficit when it came to government and even politicians. It was government and politicians who did things that took away the confidence. The board needed to guard against that. It was a blunder on the part of the Acting CEO. It was unprofessional. At this level of leadership, the TikTok was uncalled for. The faster the board started a process of filling the vacancies, it would then stabilise SAT. It would also cut out such acting in the process, in the form of cover-ups.
Ms Makhubela-Mashele said that the United Kingdom in previous years had put a red flag on South African passports simply because it was easy for scammers to get a South African passport. That on its own indicated that it was not a source market that would have as much returns as SAT had put in the proposal. Moving forward, with such proposals, SAT needed to have a pool of countries that it could have relations with. However, SAT needed to look at the relations South Africans had in visiting that country. She did not want to sponsor a club from the United Kingdom because the country had already red-flagged South Africa for whatever reasons. Perhaps SAT should look at source markets where South Africans could get easy visas application and transportation for people coming into the country. In future, SAT needed to provide a proposal that it could compare. Something that was comparable that could work for South Africa and the other country.
Ms Mpushe noted the questions that had not been covered. Who convened meetings? Mr Mtati had said that the board took full responsibility for everything and apologised for the mishaps. Had they changed the process for the appointing of the Interim CFO by using an agency instead of the board? What was the reason for only focusing on the CFO? Why had they not focused on stabilising SAT by ensuring that all vacant posts were filled including that of the Acting CEO? When did the board decision arise that the proposal needed to be forwarded to the relevant stakeholders, that of the Cabinet and Treasury. Was it before or after the trip to London? When was the actual tabling of the deal to the board? Who made the presentation to the board on the deal? Was it the Minister or the Acting CEO?
Ms Boshoff asked if the Committee could have access to the other projects that were discussed at the board so Members know what they were. The Committee needed to know the discussions that the board had with Tottenham Hotspur. There were various takes in the media on the three board members that had resigned. Some media houses said that the members had resigned due to misconduct; others said that it was because of a difference of opinion. Could the Committee be given insight why those members resigned?
An unnamed Member of Parliament requested that the Department have a timeframe for the investigation so that the Committee monitor it according to that timeframe. When was SAT going to start the process of appointing the CEO, CFO and COO and when did it envisage it would finish that process? The board did not respond to the question whether the Minister knew about the deal. Did the Minister know about this project? The Minister had said in the media that she did not know about this project.
The Chairperson asked the Office of the Minister to request the Minister to come back to the meeting and respond to that question. The board members would not be able to respond to what the Member had raised.
Mr De Freitas said that he supported that there be an investigation. He proposed that the investigation be led by the Committee. His concern was that it should not be done by the Department because it was an interested party. In effect, the Department would be investigating itself as SAT was an entity within that department. The Committee would also have the power to subpoena people. Board members who had resigned may not want to speak out about what was discussed in board meetings. The Committee could request that they provide that information. There was a long history in previous Parliaments where committees had undertaken investigations. He had information that the Minister was well aware of the deal and had authorised the UK trip herself. That was one of the reasons the Committee needed to have an independent investigation led by the Chairperson.
Mr April requested that the Minister come to the meeting. Members knew that the Minister was not busy. The Minister was available. It was disappointing that the Minister would come to the meeting and then go. It showed why the Department was acting like it was as the Minister was not treating this Committee with the respect that it deserved. It should be known in the public domain that this disrespecting of the Committee was the consistent behaviour of the Minister. If the Minister did not come now then he wanted the Committee to take it further than this.
Ms Gomba said that there should be policies and strategies in place on how the board did its recruitment. She was not sure why the policy was not followed when the board recruited. She failed to believe that the board was the one who was not following the policy in place. She had questions that were not adequately responded to. One question was the manner in which the CFO was appointed. Mr van der Walt replied for himself and the response was about his qualifications and not how he was actually appointed. The CEO did not respond to why he ordered Mr van der Walt not to be part of the meeting. Mr van der Walt "declared everything" but he was told to be outside. There was something fishy there. The Acting CEO said that he believed the document was leaked by a board member. She asked him to be specific about how many board members had the document that was leaked. Was the CEO sure no money was spent towards the deal? Who sponsored the trip? Who approved the budget of the trip and from where did the budget come?
Ms Maneli said that the sponsorship deal timelines showed that there were still officials who could keep up with the stipulated timelines. Could this be translated so that the SAT acting positions could be put to an end? Could the same zeal officials applied to ensuring that within one month they were able to consolidate this deal be translated into other SA Tourism activities? The idea was good but the timing was not perfect.
The Chairperson noted there were questions put directly to the Minister. She handed over to the SAT Board Chairperson to respond.
SA Tourism Board response
Dr Botha said that the challenge he had was that the Chairperson had asked him to introduce himself and then to just keep quiet. For that reason, he had deferred to the Deputy Chair to respond to questions.
Mr Mtati responded that the process to appoint a CEO was underway. The closing date had come and gone. The process would be completed to appoint a CEO. The process to appoint a CFO was also underway. That was the part that related to the board. The board had given a mandate to management to fill other critical vacancies within the organisation. The board had been advised that the vacancy rate was at an unacceptable level. It was important that the board act. The mandate had been given to management to act on that particular issue. He assured the Committee that SAT was doing something to have permanent executives rather than people in acting positions.
Mr Mtati noted that the information about the other proposals that had been submitted would be provided to the Committee as requested. Some were approved by the board; some were rejected; some were consulted on with provincial authorities and were not approved.
The Chairperson thanked Mr Mtati for his responses. She agreed with Dr Botha that there was nothing for him to say in this meeting. There was nothing for him to respond on this matter.
The Chairperson announced that the Minister of Tourism was back in the meeting. There were a number of questions which were raised in the meeting that required the Minister’s response as the political head. There were outstanding concerns as expressed by Mr April earlier that the Committee felt continually undermined by the Minister. The Committee should focus on the subject on the table, which was the Tottenham Hotspur deal. A Member had asked if the Minister was aware of the deal and had authorised the trip. There were many questions raised earlier that warranted the Minister’s response. Specifically there were concerns around the resignation of board members and the subsequent filling of those vacancies without following due process. The process was that when a board was appointed, it was gazetted. Concerns were raised if the new board additions were vetted. She had noted board members who were unable to attend this meeting as they could not book flights. There was a concern about the Interim CFO being headhunted without due process in December. Today it was February and there was a scandal of the Tottenham Hotspur deal. The CFO’s responsibility was only for seven months. Members raised a concern about how could it be so coincidental that such a person was at the helm when he was involved on a consulting basis with the company that was benefiting from this deal. The deputy chair of the board said that there was no deal and no decision. She remembered vividly that the news had crossed to Tottenham Hotspur headquarters. On that particular day there was supposed to be a match announcing this particular deal. She found it difficult to believe that there was no deal on the table when Tottenham Hotspur was ready to play a match in honour of the deal. There were a lot of mixed feelings and mixed messages around this matter. There were questions that had not been responded to by the CEO. Was there a National Tourism Information and Monitoring System in place? The Committee also asked the cost of the UK trip. A chronology of the events and what had happened before the deal needed to be submitted to the Committee. It needed to have all the costs. She asked Mr Mtati to apprise the Committee why the board decided to issue the vacancy advertisement externally. This was opposite to what the Committee had suggested as it thought that the advertisement would be done internally. Was there not enough capacity within SAT to promote from within? Why did the board opt to get an agency to hunt for an Interim CFO? It was contrary to what had been done with the Acting CEO. What were the cost implications? The board should not procure from an external entity to appoint persons in acting positions. It was important that to be responded to.
Minister of Tourism response
Minister Lindiwe Sisulu responded that she did not know of the deal. She knew of the deal when it became an issue and board members came to brief her about it. The deal does not exist until several steps are followed. One of those steps was to get the permission of Treasury. Secondly, it was to get the permission of the President. She did not know when the board members left for London. In terms of protocol, request for permission to meet with the board was normal if it was from outside. What it was about she did not know. She did not know if they had got permission from the board chair. When they came back she had watched the press conference led by Mr Khumalo. That was where she picked up most of the details that came after that. She approached the Minister of Finance who had said that the board was required to write a letter. She had since been informed by the board of this particular effort. It was in the preserve of the board to do its work. It was part of their responsibility to go out and seek opportunities to grow the entity and the environment that it was working in. The board did not need the Minister’s permission, except where it exceeded a particular financial amount. She was not able to give permission until she was advised or permission was given by the Minister of Finance. None of those steps had been taken.
The Minister replied that the board did not need her permission to go abroad. The board was competent. Its job was to seek out better ways in which to sell South Africa. There had been a board meeting where all of this had been explained to the Department. At that time, the board chair was Dr Botha. The Department issued a press statement which it had not put out as it was brought to its attention that in terms of protocol when there was a State of the Nation Address there should not be a side issue going on as it may detract from what the President says. That was why the Department did not have the press conference. This was a convention in the regulations. It was also the reason she had excused herself from this meeting as in fact this was not allowed by Cabinet protocol. The "dismissed member" that the Committee was speaking about was not a board member. The matter that led to this was currently under review. The Department was in the process of appointing lawyers because of a number of things that had happened in the board and things that had affected the Department. She could make that available to the Committee but she had to consult her lawyer on whether or not this was permissible. The member was dismissed but she was not a board member. The way to resolve the problem would be to go back to the board chair. It was not in the purview of the Minister to deal with that explanation.
The Minister replied that the Department learnt about the matter of the CFO and the possible conflict of interest during board proceedings. Immediately after that she was informed that there was a problem. She immediately convened a board meeting on Saturday. By that time at least three board members had already relinquished their position. The outcome of that meeting would be distributed to all Committee members. The Department would have wanted to call a press briefing but in terms of convention, she was not allowed to do that before the President delivers the SONA. The Department was going to do that after the President had spoken so as not to tarnish the environment in which the President was speaking. The board came to the decision to ask the CFO to step aside for a while until the board had a meeting on the matter and had taken the necessary steps to resolve the issue and understand what exactly was going on. She had not met since with the board. She was aware that board members were present. This matter was under discussion. The CFO was in the meeting to present himself. The board had asked him to leave the meeting so that it could discuss the matter and so that it could sanitise the area in which it dealt with matters of this nature.
The Minister replied that Tottenham Hotspur did not have a deal. That would have required her permission. The interaction with Tottenham Hotspur was in the mandate and purview of the board. The only time the Minister would have anything to do with this matter would be when the expenses were beyond a particular amount of money. This would be when the Department would be required to meet with the Minister of Finance and receive permission for that. It had not gone to that point yet. No deal had been signed. The board members did not need her permission to go to London. The resources to go to London was part of what SAT budgeted for. Its job was to sell South Africa and to find new markets for South Africa on a regular basis. That was not something in her purview to deal with. That was why there was a board.
On why it was possible for there to be new board replacements immediately, advice was sought from her legal adviser before taking a decision to appoint new board members. The advice was from Adv Menzi Simelane who was the former Director-General of Justice to Minister Sisulu on the appointment of board members according to the Tourism Act 2014. It stated "To advise the Minister on the appointment of board members of South African Tourism Board. On 3 February 2023, three members of the board of South African Tourism resigned. At the time, they were serving a term of three years, having been appointed by Cabinet in October 2022. This means that their term was due to end in October 2025. It follows that their resignation leaves an unexpired term of 32 months to two years and eight months in respect of the office of each member. The Minister is entitled to replace the board members who have resigned, relying on section 16 of the Tourism Act. It states as follows, Vacation of office and filling of vacancies: 16(1)(a) a board member must vacate office, if the member (a) resigns by written notice and it is delivered to the Minister or the chairperson of the board, (b) ceases to hold any qualifications necessary for that member's appointment to the board, (c) is unable to perform his or her functions due to mental illness or severe or profound intellectual ability contemplated by the Mental Act or becomes subject of any disqualification contemplated in section 15 or is ruled by the Office of the Minister after consultation or for any other reason, the board becomes vacant before the member’s term of office expires. The Minister may appoint any suitably qualified person to fill the vacancy for the unexpired portion of the period, which such member was appointed. As a result of the number of board members resigning before the end of their term, three vacancies were created, which necessitated filling. Section 16(2) provides that mechanism for the filling of those of those posts. The appointment of any replacement to those members must conform to the requirement that such persons are suitably qualified. It follows that the assessment of suitably qualified must inter alia, have regard to the objectives of the Act, appropriate qualifications and the knowledge of the sector. This mechanism is available only in respect of a vacancy created by a resignation and it is intended to ensure the business of the organisation continues uninterrupted".
That was what Adv Menzi Simelane sent to her. He was her legal adviser. She had looked into the law and therefore proceeded to ensure that the SAT board was quorate. The new members were called to the board to introduce them to the board, and to ensure that the responsibilities of the board could continue. This happened at a time when there was a great deal of media attention around the possible Tottenham Hotspur agreement. She was not aware that any agreement had been signed with Tottenham Hotspur. This had not been reported to her. This would only have happened after the Department got all the necessary agreements, especially from Treasury. The board met as a board on a Sunday and the new board members were introduced. The CFO was asked to recuse himself and the business of the board continued. And that was encompassed in a press statement that it had put together which will be made available or will be read out by the chair in a while. She would respond to any other matters that had been left out.
Ms Maneli asked the Minister to elaborate on the recusal of the CFO from Sunday’s meeting. What did this mean for his standing now because he was present in today's meeting? In terms of the Minister's participation in any activities leading up to SONA, did it involve not participating in a Committee meeting? Did the Minister not participate in a Committee meeting because of SONA on Thursday 9 February?
Minister Sisulu replied that she could not go public on any matter that may detract from what the President was going to say. It was a protocol of government; it was a protocol of Parliament. When she saw the media present she thought that she should recuse herself.
The Chairperson asked the Minister to note the questions and respond later.
Ms Maneli said that she hoped to see the Minister again because the Committee had a lot of outstanding issues with the Minister that were not part of today’s agenda. She asked for the Minister to avail herself after SONA as the Minister needed to account to the Committee.
Mr April said that he was worried that the Minister was saying to the Committee that there were a lot of shenanigans happening in the Department; however, the Minister was not taking the Committee into her confidence. That was worrying. The Minister could not operate as if she worked in a silo. She was the political head of the Department, but Parliament did oversight over the executive. What were those things that were happening in the Department that she was referring to? The CFO had been sitting outside the meeting. The CFO was constantly being put to one side. Was there something that the CFO knew that the Committee should know? He was the one who was headhunted in December. He was the one who was responsible for steamrolling this process of a R1 billion deal. He pleaded with the Minister to take the Committee seriously. It took the Minister very seriously and respected the Minister in her political office. The Committee wanted the Minister to take it into confidence. When people referred to the government, they referred to both the Minister and the Committee. He did not want it to seem like the Committee did now know what it was doing. He told the Minister that the board had been fumbling. He was shocked to learn that in three months there had been three different board chairpersons. How could that be consistency? What kind of circus was being run? The board could not continue with management in acting positions.
Ms Makhubela-Mashele asked the Minister to provide the process followed to fill the three board vacancies besides the legal advice. The people the Minister appointed must come from somewhere. Where had the Minister taken them from? How did the Minister arrive at these specific names? When people were headhunted to serve on the SAT board, the Minister needed to take the Committee into confidence to explain why she selected those people and what expertise she wanted. The Minister needed to provide the reasons she had appointed Dr Botha as the board chairperson. She suggested that the Chairperson ask Parliament's Legal Services to also provide a legal opinion on appointment of board members. Before a person could be appointed, they needed to be vetted. The person's appointment needed to be gazetted. This was not done for the three members appointed. More concerning was that they were not part of the initial pool of people that came through the shortlist of the initial board. This board was fairly new and had been appointed in October 2022. Before the board appointment there had been a back-and-forth of interim boards. What did the Tourism Act say around board appointments that must be in place for this entity to be operational? The SAT board chairperson said that he received his board appointment letter on Saturday. On Sunday he became the chair. Today he comes to Parliament to respond to processes that he was not part of. The Committee did not want to look at the Minister and what she did with suspicion. The Committee needed to clear the air. It did not want to look at the board functions and operations with suspicion. Since October to date there had been three chairpersons. That raised suspicion in the Committee. The Minister needed to allay these fears so that all could work in an environment that was conducive.
Ms Gomba thanked the Minister for attending the meeting. However, she raised concern for the Minister not coming to the meeting that the Committee had requested. The Minister had to account before the Committee. It was still a concern. That made her think that the Minister only wanted to attend the importance meetings. Hence, the Minister’s attendance today. Was the Minister aware that the board was not a quorum when it took the decision to approve the idea that was brought to it by the Acting CEO? There was no quorum at the meeting and it was overlooked. There was no consensus in the board. She noticed that some board members were too scared to speak due to fear of being kicked out of the Department. People were not very free in this Department. It was painful to work under such conditions. When the Department appointed members of the board, there needed to be assurance that people would do their work without fear or favour. She did not see that happening here. It looked like people were threatened by the manner in which people were being chopped and changed around. Was the Minister aware that the board did not follow the set strategies by the board on how HR was supposed to be recruiting. The recruitment strategies were not being followed. The set policies that were already there were not being followed. It was important that government Departments and its entities followed the correct procedures on how to recruit. This was becoming a very serious problem where people did as they liked. People were being put under pressure, others were resigning unwillingly. She asked the Minister where was the Director-General? Was the Director-General aware of what was happening? She was worried about the way the board did as it wanted, under the watch of the Minister.
Mr De Freitas said that it was the Minister’s predecessor that, after the Covid pandemic, had said that the Department was going to revive the tourism targets. It was said that the targets that the President had set a few years back would be unrealistic. Was this still the case? The Minister’s predecessor said that the Department would be revising the target and coming up with the target in a scientific way. That would be very important as part of this discussion as well because it was one of the reasons given as to why this sponsorship was proposed. The Minister was correct to say that the board was independent and that it was an independent entity. However, the shareholder was 100% government, which she represents. Listening to the Minister, it sounded as if the board had been left to its own devices. He was a little concerned about that because the shareholder was the government. It needed to ensure that the board and the entity did what needed to be done. To him it sounded like the board was independent and could do as it liked. That was a dangerous precedent.
Ms Mpushe asked if the response of the Minister implied that the board, in its independence, was not accountable to the Minister or her office? The Minister raised the fact that she was not aware, but that she approved that the board may proceed with the overseas trip. She discussed the board members. She had not received any information about what led to the previous chairperson of the board being moved to be an ordinary member. She discussed the removal of Ms Ntombela, on the basis that her vetting had to be done for a second time and there were issues. If vetting had not been done on the new members of the board, then where did that leave the Committee? She discussed the trip to London. How much was spent on the trip by the board? she had never been in a Portfolio Committee that had been undermined by the Minister. She had never experienced a Committee like this where the Minister was not a part of the meetings. The Committee had to allow the Acting CEO and board to respond to questions that should have been answered by the Minister.
Minister Sisulu responded that the matter that the Committee was discussing was a matter that she had referred to her lawyer. She wanted to keep it at that particular level. She also felt extremely undermined. She had been in government for a very long time. She had a Cabinet Committee meeting that she attended every Tuesday. She had asked the Chair of the Political Committee, who was the Deputy President then, to have a rescheduling of the meetings of Tourism Portfolio Committee because it clashed with her being part of the Cabinet Committee. This had happened many times. Either the dates would be shifted for the Portfolio Committee or someone who represented the Minister would be there. The Deputy Minister did come often. She had a Cabinet Committee and that was her first responsibility because the President presided over that. That was why she had asked for the shift or for there to be alternate days for her to come in. She had left all that information with her lawyer who had been to the Committee to deal with that matter. Her lawyer told that he was chased away. Therefore she would leave that matter with her lawyer and there needed to be another meeting to discuss it. Today she was in this meeting to deal with the matter that the Committee had called the SAT board for. She did not know how much was spent on the board going to London. The board did not need her permission to go anywhere. The board did not need her permission to use any amount of money. The board had schedules that it had to adhere to. The board did not need her permission. The board did not get her permission. When the board got back, she heard that the board had secured a proposal from Tottenham Hotspur. She heard this when she was listening to the CEO on television. She had no knowledge on how much was spent or what was done. She heard it first on television. She wanted some time to understand this before it was given a go-ahead.
She did receive a briefing afterwards on the deal might. She was informed that the board needed the permission of Treasury. She would expect at some point that if this was given the go-ahead, that this letter would be written before government gave its consent. Beyond a certain amount of money, no Department could engage without the permission of Treasury. The permission of Treasury had not been sought; therefore, there was no deal as far as government was concerned. There were negotiations going on. She was briefed on how far it had gone with those negotiations. She was not aware of a deal. She would have needed to be part of that deal, the Minister of Treasury would have needed to be part of that deal. What was going on in the media was in fact a 'proposal'.
Minister Sisulu explained that Dr Maphazi was no longer the board chairperson but was still a board member. The Minister felt that it was very unethical to discuss this matter in the presence of Dr Maphazi. Dr Maphazi had written a newspaper article about matters that should be kept within the board and this was unacceptable. However, she allowed Dr Maphazi to continue as board member because she believed that Dr Maphazi may have erred. No board member had the authority to write articles on any matter that had to do with the board outside the permission of the board. The Minister therefore decided to restructure the board so that the board was able to forge ahead because it was stormy times. She then went to a pool that was available for any minister should they want people who were competent to serve. From that pool, the Minister pulled out Dr Thozamile Botha. She had known Dr Botha for some time because of the prominent role that he had played in various other entities. At some point when she was the Minister of Human Settlements, he was the head of the Minister’s support team. She had knowledge of his competence. His integrity was beyond reproach.
Minister Sisulu was not aware of the trip to London. She had been briefed after the media briefing. She received the media briefing when everyone else received the media briefing.
Minister Sisulu replied that the matter of Ms Pretty Ntombela not only affected Ms Ntombela but also affected three board members. That matter had been referred to her lawyers. Therefore, it was outside the scope of this Committee until such a time as the legal processes had taken place. It would be a breach of confidence and it would not be possible for her to go into that matter. There had been three people who were communicating with each other and were clearly undermining the very edifice of the Department of Tourism. This was picked up in a scan of information. From time to time the Department made sure that its systems were secure. In the process of that it had come across information that was damning of four members of the Tourism Board. They were clearly plotting how to remove the CEO and putting the Director-General in his place. It was something that was completely unethical.
At some point when this process was advanced, she would inform the Members about it. It was written in the most horrific way. They described every member they were talking about in the most horrific way. This was from members who were supposed to be running the board. This would be brought to the Committee at a different time, when the Minister had legal advice. It was proposed that this matter would be investigated by a suitable lawyer to expedite the matter. Part of the people who would be investigated was the CFO who had left. When the board members were not in the meeting, then she would be able to take the Committee into confidence about some of the issues that had come out there. She had found herself in a very difficult position where board members were exchanging messages, plotting what to do and speaking very badly about ministers, both the current and the previous Minister. This would not happen in her time; it went beyond that. When she arrived at the Department, an interim SAT board was appointed. At that particular time it was merging with Brand SA. The responsibility had been given to the Ministry to merge SA Tourism with Brand SA. To be able to do that it could only appoint an interim board and not a full board. This was because when it merged with Brand SA, it would have a new mandate and a new specification about the kind of persons the board needed. The interim board ceased to be when the Department appointed the current board. The process of the merger involved two departments. When it realised that the merging of the two would take some time, it then appointed a full board and took the full board to Cabinet who approved it. This was the full board that was present.
Mr Mtati replied that at the point when the decision was made on the Tottenham Hotspur deal, the full complement of the board was there. The people resigned after the decision had been made. At the time the board had a quorum. The decision was made for SAT to ensure that it had the regulatory approvals from the Minister, the Department and Treasury.
The Chairperson said that it would be prudent for the Committee to get the board meeting minutes and the attendance register. It should be sent to the Committee so the matter was dealt with and put to rest.
Minister Sisulu said that the only briefing she had around this period with the board was with the new board that was present today. When she saw in the media the uproar around some of the issues, how information had gone out into the public domain about all of these things, she then decided to see the board to understand what was happening. When she got there, she discovered that the CFO was there as well. The board had to ask him to leave. By that time, so much had happened. The three board members had already resigned. By that time, she had reconstituted the board so that it was quorate. The Minister needed to have a full report. She needed to ensure that there was complete control over what was going on in the Department. It was all over the news with the backlash on the amount of money that was going to be spent. She thought that she needed to intervene. The three board members were already writing articles about why they resigned. The Minister needed to get to the bottom of what was happening. When she got to the board, she was informed that they had indeed resigned and that there was a new CFO. The board had indicated to the CFO that he should leave the room as it wanted to have discussions with him outside. The board took the decision that there should be disciplinary processes to understand what had happened and how it came to have that CFO. He was the only person missing from the briefing that she had been given. Otherwise, there was a quorum. It was a virtual meeting because she had called the meeting at short notice. She had wanted information on the matter because the media had already started going completely wild about something she was not aware of and had not been briefed on. She needed to be briefed and understand why the three board members had resigned. She also needed to give assurance to the country that the board was under very firm control of the Ministry and Department. The Department needed to ensure that it would deal with this matter in a way that showed confidence.
Minister Sisulu said that the tourism targets had been revised upwards to ensure that the country could make up for the loss it experienced during Covid. Covid had been devastating to tourism outcomes; therefore, it had to revise the targets to ensure that it could gain ground. In every day pursuit of their work, the board members were governed by an Act. Thereafter reports were given to the Minister. When a board member contravened what was expected of them, her job was to ensure that the necessary rectification was attended to. She was not aware of three board chairpersons. The one chosen by her was an interim chair for an interim board. That chair had since relinquished her position.
The Chairperson asked what was Dr Aubrey Mhlongo then.
Minister Sisulu confirmed that Dr Mhlongo had been a chairperson; there was only one interim board; there were not three.
Ms Makhubela-Mashele said that there had been three chairpersons in the fully fledged board. Dr Mhlongo had been the chair. Dr Maphazi had been the chair and now there was Dr Botha. The Minister must have heard incorrectly as she was not talking about boards but board chairs. Since October until now there had been three different chairs. That talked to instability. It indicated that when something was not right, the chair was changed. She did not think that Dr Botha would take his responsibilities confidently with this chopping and changing of chairpersons. The Minister needed to allay those fears so the Committee could work with a stable board.
The Minister assured the Committee that having worked with Dr Botha, and she was sure that the Committee had seen his CV, that he was not in an interim position. She had full confidence in his ability. She had full confidence in his ability in the public sector. The board was trying to consolidate what it had and move forward. The Minister confirmed that there was a quorum when the briefing was given. She was not there. The board was empowered by legislation to seek various ways in which it could improve its work and its output. That was the power given to the board. She had been horrified to find out what had been going on among certain board members when the Department was not there.
The Chairperson thanked the Minister for her responses. It would be remiss of the Chairperson to not respond or correct some of the things the Minister had raised. The first was that the Committee had not seen the CVs of board member in this meeting. The Committee was never privy to that information. The Committee had therefore never seen the CV of Dr Botha.
The Chairperson discussed the shifting of the Portfolio Committee meetings because they clashed with Cabinet meetings. As Parliament, the Committee had a responsibility of oversight. It was informed by the Programme Committee. It would have never shifted its meetings to suit the diary of the Minister. She did not believe that the Committee meetings clashed with the Minister’s meetings because at one stage Members had raised a particular concern when the Minister submitted an apology two minutes before the meeting. The Minister had said that she had a family commitment; instead it was shown in newspapers that the Minister was barred from visiting a particular person in prison. That left a lot to be desired. The Committee would never have considered shifting its meetings for that. It was important to correct that.
The Chairperson said the SAT merger with Brand SA remained a dream and the Committee knew that it would never happen. She was not sure why it was mentioned today. The Committee had invited the Minister on numerous occasions to take the Committee into confidence on that. It had created instability in SAT and that was why SAT found itself in this particular mess. She commended the media who went wild on this Tottenham Hotspur issue, and rightfully so. She commended the whistleblowers. Otherwise, the Committee would not have been sitting today deliberating on this matter of importance where monies were going to be spent on things that were not thought through. These were things that were not beneficial to the country itself. The timing was also something that could not be explained. It was an egg on the face of the people who were the representatives of this government. There were millions of South Africans unemployed and living in abject poverty. The wildness of the media had assisted the Committee.
The Chairperson summarised what the Committee had decided and put to the board on this particular matter. Firstly, the deal with Tottenham Hotspur must come to a stop and end today. Secondly, the Interim CFO must leave his position immediately. His presence in SAT presented a conflict of interest on this particular matter. How he ascended to his position was not as a result of due process being followed. Parliament funded the boards. It was monies that were appropriated by Parliament that was spent in the various entities. Hence, Parliament was seized with the responsibility of oversight. If it came to a push, the Committee would write to the Minister of Finance and the President. The Committee would demand that this money was reprioritised. There were villages in this country where people were suffering and they needed those resources. The government could not have money thrown just like that. It was within the power of the Committee to ask for the reprioritisation of that particular money. The Committee believed that an investigation into this particular issue must be done by the Committee. It was a matter of urgency.
The presentation tabled before the Committee today did not suggest that it would benefit South Africans at large. As much as the entity thought it had nothing to do with a country riddled with potholes and electricity challenges, the Committee believed that charity began at home. One could not bring visitors to a dirty home. It needed to be cleaned first and then the visitors could be brought in. A German tourist had been gunned down and Chinese nationals were abducted. The Department had to ensure that there was security and safety of visitors in the country. This deal was off. It would be easy to end it because there was no deal. Many of the speakers had said that there was no deal. There was no deal; it ended here today. The deal was off. It should not have begun; it was not going to happen. It was clear that there was no National Tourism Visitor Information System that governed the figures that were tabled the figures that were before this meeting. It was a fiction. That was an entity that was supposed to be table by the Minister so that it informed all of the information tabled today. Hence, the Tourism Business Council had challenged the figures after the press briefing by the Acting CEO. When the National Tourism Visitor Information System was in place, then the Committee could talk in confidence in terms of figures. The Chairperson noted that the Minister had raised her hand. She was not sure if the Minister was challenging the summary of the meeting?
Minister Sisulu said that the Department understood the view of the Committee and the Chairperson. Unfortunately, this was a matter of national interest and only the President could make that decision. The President should be the one to make the final decision.
The Chairperson said that the Minister was out of order. This was a Portfolio Committee of Parliament. All the executives in this country, even the President, was accountable to this Parliament. What the Minister had said was extremely out of order. The Committee stood by its decision. The Committee would not allow the Minister to disrupt this meeting and dictate what the Committee was allowed to say.
Ms Gomba said that the Minister was out of order. The Minister was speaking while the Chairperson was speaking. She was worried about the way the Minister was conducting herself.
The Chairperson said that the Committee had the responsibility to teach the Minister the protocols of this country. One of the reasons the Committee summoned her to the meeting was because of this notion of thinking that executives were not accountable to Parliament. She was happy that at some point the Leader of Government Business, Deputy President David Mabuza, was very clear in Parliament, that the executive was accountable to the Parliament of South Africa. Hence, there was something called the separation of powers. When there was time, the Committee would invite Parliament's Legal Services to present so that the Minister could desist from sending senior counsel to the Committee to represent her on matters of accountability. The Minister was accountable to this Parliament and this Committee. The Committee would write to both the Minister of Finance and the President on this matter. The Committee would suggest that the money was repositioned.
Ms Makhubela-Mashele said that Committee agreed that the proposal needed to be put on hold. This information needed to be communicated to Treasury and to Parliament. Parliament was an arm of the state. Parliament was on an equal footing. The President was going to get the Committee’s statement and letter. The Committee was putting forward a proposal that this deal was not in the interest of the country. Parliament had the right to do that. It was not up to somebody else to say that the Committee had to go to the President first.
The meeting was adjourned.
Mahambehlala, Ms T
April, Mr HG
Boshoff, Ms SH
De Freitas, Mr MS
Gomba, Ms MM
Ismail, Ms H
Makhubela-Mashele, Ms LS
Maneli, Ms ST
Mpushe, Ms PT
Sisulu, Ms LN
Xego, Ms ST
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