DA lodges court bid to block emergency funds for SAA

DA lodges court bid to block emergency funds for SAA

Tito Mboweni did not respond to a letter asking that he confirm that he will not invoke a section of the PFMA that allows him to use his emergency powers to transfer funds to SAA

The DA has lodged an urgent court application in a bid to stop finance minister Tito Mboweni from using his emergency powers under the Public Finance Management Act to transfer funds to SAA.

The court application was lodged after Mboweni did not respond to a letter from the party asking that he confirm in writing that he would not invoke a section of the PFMA (section 16) that allows him to do so.

An appropriation by parliament would be required to transfer funds to SAA. Appropriations can only be made at the time of the budget or the adjustment budget, unless appropriated for an emergency using section 16 of the PFMA.

On Thursday, the department of public enterprises announced that it had secured the concurrence of Mboweni to “mobilise funds” for the restart of SAA. It said that it projected that an amount of R10.1bn would be required for working capital and to settle outstanding obligations, including the payment of retrenchment packages to staff.

This amount was not included in the supplementary budget tabled by Mboweni on June 24.

The DA wants the court to interdict any disbursement of funds, if they have not already been disbursed. However, if Mboweni has already transferred the funds to SAA, on the basis of his letter of support, the party wants the court to interdict use of those funds pending the outcome of the application.

Public enterprises minister Pravin Gordhan and SAA business rescue practitioners Les Matuson and Siviwe Dongwana are among the respondents in the matter.

DA MP Geordin Hill-Lewis, in his affidavit to the court, said the failure of decision-makers and heads of the relevant executive to be “transparent and open” in respect of the process and timing emphasises the “lack of accountability” and the use of section 16 of the PFMA for an “unlawful and improper purpose”.

He said none of section 16’s strict requirements applied to the government’s commitment to fund SAA.

“There is no emergency. SAA’s financial decline has taken place over several years, if not decades. It was placed in business rescue late last year. Nothing about SAA’s decade-long decline or it’s current status in business rescue justifies an extraordinary short-circuiting of the usual appropriations process,” Hill-Lewis said.

There was nothing exceptional about the proposed expenditure.

He said SAA’s funding needs could have been catered for in the ordinary appropriations process where it would have been subject to parliamentary scrutiny and oversight.

Hill-Lewis said the government, as the sole shareholder of SAA and which has control of the board, must have known that business rescue would require government funding and should not be allowed to shore up a case for emergency appropriations when it had ample opportunity to earmark funding during the ordinary appropriations process.

He said postponing the funding of SAA would not prejudice the public interest.

“The public interest favours accountability and transparency.”

Hill-Lewis said that even if there were some benefit of having a national carrier, which he and the DA dispute, there was no pressing need to return SAA to business, especially not during the Covid-19 lockdown with its associated travel restrictions.

The DA has asked the court to hear the matter on Thursday and has given Mboweni until 5pm on Sunday to lodge his answering affidavit.

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