ANC's Carrim hits back at claims of 'illegal' SAA bailout

Cape Town – The opinion obtained from a senior Parliamentary legal adviser on SAA's R3bn bailout does not conclude it was unlawful, the ANC's Yunus Carrim argued on Wednesday.

Yunus, the chairperson of Parliament's oversight committee on finance, was responding to a DA statement in which the party said the adviser's legal opinion “confirms” the DA’s belief that the bailout was not lawful.

The legal opinion deals with whether Finance Minister Malusi Gigaba was correct in invoking a section of the Public Finance Management Act (PFMA) to access R3bn in funds from the National Revenue Fund to transfer to the cash-strapped airline in late September. 

After Gigaba transferred the funds, the DA asked Parliament’s legal services unit for an opinion on whether Gigaba had acted in accordance with the law.  

The opinion was written on Monday.

Carrim said in a statement on Wednesday that the finance committee had considered a content of the opinion.

“The legal opinion noted that Section 16 is intended to be used in circumstances where good financial planning and management could not avert the need for exceptional or unusual expenditure," he said. 

"The use of this provision by the Minister of Finance for the reasons set out in the Report to Parliament and the Auditor-General does not appear to be exceptional or unusual as the expenditure was foreseeable and has been made in the past". 

Different opinions 

After the opinion was made public, the DA had claimed it bolstered the party's contention that the bailout was not lawful. 

The legal adviser had written that the expenditure was "forseeable and as such, not unusual or atypical". One of the prerequisites of invoking Section 16 of the Act, the opinion contended, was that it be only used "to defray expenditure of an exceptional nature".

But Carrim said the opinion did not say the expenditure was unlawful. 

“Contrary to what is being claimed by the DA, the legal opinion does not conclude that the Minister’s decision was definitely unlawful. It says it may be so, but it is for the Auditor-General’s Office to decide on this. We will now refer to the legal opinion to the Appropriations Committee to process it further,” he said. 

He added that the majority of members in the finance committee were of the view that the R3bn for SAA could have been foreseen and should have been done through an Appropriation Bill.

“But [they] accept that it was necessary to rescue SAA, otherwise there would have been a call on the total R16.4bn guarantee exposure,” Carrim said.

Gigaba, in a report to Parliament released on Friday October 13, said Treasury viewed the transfer of funds to SAA as vital, because of the risk that a default on the debt could trigger a call on other larger guarantees which could have serious repercussions for the economy as a whole. 

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