SAA’s loan guarantee ‘within law’

The then public enterprises minister Malusi Gigaba and then finance minister Pravin Gordhan acted within the law when they granted the South African Airways (SAA) a R5 billion loan guarantee in 2012, the North Gauteng High Court heard yesterday.

Jeremy Gauntlett SC, representing the public enterprises and fi nance departments, said assertions by Comair that parliamentary processes governing the disbursement of public finances were being circumvented did not hold water.

He said the ministers were empowered to come up with interventions and save troubled entities.

“If one reads the provisions of the constitution, there is a mandate to give money in circumstances which does entrench on an appropriation. This is a very crude division of power argument being run ( by Comair), saying money-giving is only for parliament. No, it is not. The judiciary also gives money. Money can also be given indirectly through a guarantee,” said Gauntlett.

Private airline operator Comair approached the high court in Pretoria, seeking an order declaring unconstitutional and unlawful government’s decision to give loan guarantees to the troubled national airline.

On Tuesday, Comair lawyer David Unterhalter SC, said due to the perpetual government bailouts, the “technically insolvent” SAA was charging unviable rates to the detriment of private players. – ANA