'SAA bailout may not be fully compliant with the law'

Advocate Frank Jenkins says Gigaba's made a strong case as to why the allocation could not wait for a future appropriation.

FILE: A South African Airways flight takes off as another one is parked in a bay on the tarmac at OR Tambo International airport in Johannesburg. Picture: AFP.

CAPE TOWN - Finance Minister Malusi Gigaba’s R3 billion bailout for South African Airways (SAA), may not be fully compliant with the law.

That's according to a legal opinion provided to Parliament’s Finance Committee on Tuesday.

The committee had asked for the opinion following last month’s announcement that the airline urgently needed the money to pay back the money it owes lenders.

In order to invoke Section 16 of the Public Finance Management Act, the transfer of funds by Treasury must be deemed an emergency and there must be exceptional circumstances.

Reporting to Parliament last week, Gigaba said R1.8 billion was needed to pay Citibank, and another R1.2 billion for working capital.

Parliamentary legal adviser, Advocate Frank Jenkins says Gigaba's made a strong case as to why the allocation could not wait for a future appropriation.

But he says the expenditure was foreseeable and not unusual or atypical.

By law, Treasury must inform the Auditor-General of the expenditure within 14 days.

Jenkins says it will ultimately be up to that office to decide whether the allocation to SAA is legal or not.