A-G to decide on Gigaba

Parliament’s standing committee on finance yesterday said Finance Minister Malusi Gigaba, pictured, should have used another route to provide financial rescue to South African Airways (SAA), but was correct in acting to prevent the national carrier from defaulting on its Citibank loan.

The committee issued a statement after a parliamentary legal advisor found that the R3 billion bailout Gigaba gave SAA in September may have been unlawful.

It had requested a legal opinion after the Democratic Alliance (DA) accused Gigaba of trying to sidestep parliamentary scrutiny by invoking section 16 of the Public Finance Management Act to help SAA meet its debt payments.

DA MP Alf Lees said the minister should have submitted a special appropriations Bill instead of extending an 11th-hour bailout, as it was foreseeable that SAA would not have the R1.8 billion needed to honour its loan agreement with Citibank.

The committee agreed that a special appropriations Bill would have been the correct option but said ultimately it was up to the auditor-general to rule on the legality of Gigaba’s use of section 16. The matter will be referred to the auditor-general’s office.

It stressed that the legal opinion noted that the section could be invoked where “good financial planning and management could not avert the need for exceptional or unusual expenditure”.

It added that there had been a clear need to come to SAA’s rescue as a default would have had dire consequences. – ANA