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DA files urgent court application to interdict govt bailout for SAA

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DA files urgent court application to interdict govt bailout for SAA

17th July 2020

By: News24Wire

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The Democratic Alliance (DA) said on Friday it had filed an urgent interdict application at the Pretoria division of the high court to stop the bailout of South African Airways (SAA).

Finance Minister Tito Mboweni and Public Enterprises Minister Pravin Gordhan have committed the government to making available funding to the troubled national carrier, whose business rescue plan approved by creditors this week calls for R10.1-billion.

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The DA court application seeks to block the use of Section 16 of the Public Finance Management Act (PFMA), which gives Mboweni “emergency” powers to spend money not budgeted for in “exceptional” and “unforeseen” circumstances, the party's spokesperson for finance Geordin Hill-Lewis said in a statement.

"Yet another public bailout of SAA does not meet the definition of an unforeseen emergency. To use this as a pretext to bail out SAA again would be unlawful," he said.

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He said the DA had asked Mboweni on Thursday to confirm in writing that he would not invoke Section 16.

"He did not reply, and so now we are approaching the court," said Hill-Lewis, adding that Mboweni had until 5pm on Sunday to file an answering affidavit.

In 2017, a legal opinion obtained by Parliament with regard to a R3-billion bailout that then finance minister Malusi Gigaba had extended to SAA found that the use of Section 16 was likely illegal.

Hill-Lewis said the DA was committed to the prudent use of public resources to meet the needs of South Africans, especially now that millions had lost their jobs as a result of the Covid-19 pandemic. 

"Bailing out SAA is an ethically indefensible choice given the poverty and hardship so many are facing in the country," he added.

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