Portugal’s Partido Popular (CDS-PP) has accused the government of misleading parliament, and it has a valid point.
The CDS, formerly part of the ruling coalition and now in opposition, has criticised the secrecy of Prime Minister António Costa’s administration over letting Chinese capital into the Gateway consortium and thus allowing Hainan Airlines become a shareholder of TAP.
"This Government thinks it can deceive parliament and MPs, with the Left Bloc and Communist Party providing cover," accuses the CDS which says the government omitted key facts when reporting on the recent buy-back of shares in TAP.
"There was a clause in the buy-back agreement that allowed China's Hainan Airlines to buy an undisclosed number of Gateway shares and to participate in a capital raising exercise.
"The government reported twice to parliament and made several public statements which absolutely omitted this fact, and childishly hid this clause," added the CDS source.
China’s Hainan Airlines now will be shareholders of TAP through its part ownership of the private consortium Atlantic Gateway, currently owned by Humberto Pedrosa and David Neeleman.
The Government authorisation of the sale of Gateway shares is contained in the memorandum signed last week, the summary of which omitted to mention this important arrangement.
There is no doubt about the share deal, "The Portuguese State authorises the entry into the capital of Atlantic Gateway by Hainan Airlines, the percentage to be agreed between the shareholders of Atlantic Gateway and Hainan Airlines."
There also are plans to raise €120 million of fresh capital for TAP of which €30 million will come from the taxpayer and €90 million from Gateway, "the Portuguese State may also authorise Hainan Airlines to subscribe directly in this fundraising.”
This means that at least part of the fresh funds lent to the TAP will be Chinese and as these obligations will be converted into shares.
Hainan will end up controlling between 10% and 13% of TAP's share capital, although it needs to be careful about the percentage to avoid any scrutiny from European competition and traffic control rules.
The PSD leader Pedro Passos Coelho today criticised the deal as “regrettable” and said the fact that the government omitted to mention the Chinese buying into TAP needs urgent clarification.
"We do not know how it is that the public interest is defined and defended in all this. I think it is very unfortunate and I hope the government will use the opportunity to explain to parliament and discuss with all transparency what is going on so we know what the renegotiations that took place actually mean," said the PSD leader who stressed that the government's attitude is "reprehensible."
Pedro Passos Coelho said he hoped to get clarification "as soon as possible", adding that the government should not hang around until it is called to parliament to explain its actions, but should offer an explanation right away.
"This is not a proper, adult way, is not a mature way to deal with the Portuguese and Portuguese politics," said the former PM.
Had António Costa been up front about the 'Hainan clause,' he could have controlled the message and given it a positive spin.
As things now stand, he has allowed suspicion and accusation to cloud an issue that should never have been an issue for this seasoned politician.
Gateway is a private company and, unless prevented by a previous agreement with TAP, is able to sell its shares to whomever its owners please within the parameters set by European rules governing airline ownership.
Prime Minister António Costa can expect a bumpy ride.
