DA’s urgent bid to interdict Tito
ACCUSATION: MADE ‘UNLAWFUL’ USE OF FINANCE ACT
Party says there’s no emergency that warranted extraordinary shortcutting. Moneyweb
The DA has filed an urgent application to interdict Finance Minister Tito Mboweni’s authorisation of funds for South African Airways’ (SAA) restructuring using his emergency powers under Section 16 of the Public Finance Management Act (PFMA).
The two-part application was filed at the High Court in Pretoria after Mboweni failed to respond to a legal notice sent to his office by the DA in which they requested confirmation on whether Mboweni had made the “unlawful” use of Section 16 in committing to provide and disburse public money for SAA’s restructuring.
Mboweni was given until the end of business on Thursday to respond to the notice or face a court challenge.
This comes after the department of public enterprises confirmed that the government had met the business rescue practitioner’s Wednesday deadline to provide a letter committing to “support and source funding” for the airline’s restructuring needs.
Exceptional circumstances
Section 16 of the PFMA allows the minister of finance to bypass normal budgetary appropriation processes in emergency situations to provide money for items of an “exceptional nature which is currently not provided for and which cannot, without serious prejudice to the public interest, be postponed to a future parliamentary appropriation of funds”.
Proceeding under the assumption that Mboweni has invoked this section DA finance spokesperson Geordin Hill-Lewis has asked the court for an interim interdict to stop the minister’s emergency authorisation to use public funds to fully or partly fund the rescue plan pending a review of the decision.
If the money has already been released to SAA, Hill-Lewis has asked the court to interdict the airline and its rescue practitioners, Les Matuson and Siviwe Dongwana, from using the money.
The DA argues that it has a “clear, alternatively prima facie, right to an interdict” because the use of Section 16 is “clearly unlawful” as the requirements laid out in the section do not apply to SAA’s case.
Lewis-Hill said there was no emergency that warranted the “extraordinary shortcutting of usual appropriation processes” as the company had been in financial decline for over a decade. Further, there was “nothing exceptional” about the required funding and postponing the funding would not prejudice the public interest.
Declare it invalid
The second part of the application looks to have Mboweni’s alleged decision to authorise funding for SAA using Section 16 of the PFMA reviewed and declared invalid.
While the business rescue plan has outlined expenditure of ablut R10.3 billion for SAA’s working capital, retrenchment packages and the settlement of creditors’ claims, the statement welcoming the National Treasury’s concurrence said R10.1 billion will be needed to fund the rescue plan, and to clean up and stabilise the balance sheet of SAA.
The DA’s proposed date for the hearing is Tuesday.
We have clear, or prima facie, right to interdict