Court to rule on who will pay costs in DA’s wrangle with Mboweni

Judge Norman Davis is to rule on Friday on who will pay the costs for the DA’s aborted interdict that aimed to prevent finance minister Tito Mboweni from bailing out SAA using his emergency powers.

The DA attempted to withdraw their case on Tuesday after receiving Mboweni’s affidavit in which he stated that he had no intention of bailing out the state-owned airline. But while the case was withdrawn the Treasury argued that the DA should pay costs as there was never any evidence that he planned such a bailout.

The DA in turn argued that the Treasury should pay costs as prior to launching the application, they had written to Mboweni last Thursday requesting that he provide clarity by 5pm that day. When he did not respond, the DA went ahead with their application.

In his replying affidavit, Mboweni makes it clear that the government has not committed to funding the SAA business rescue plan.

A media statement by the department of public enterprises last week stated that Mboweni had committed the Treasury “to mobilise funding” for the SAA business rescue. It made reference to a letter signed by the two ministers to the SAA business rescue practitioners. This lead to the widespread understanding that the Treasury would be providing the R10.1bn that is required for the plan.

Mboweni’s affidavit, which was filed in response to a DA application to block him from making an appropriation to SAA, states that he has no “imminent plan” to do so.

The wording of the letter is significant. The government has not committed to funding the requirements of the business rescue plan, but has instead committed to mobilising funding for the short-, medium- and long-term requirements, to create a viable and sustainable new SA airline,” Mboweni's affidavit says.

“Mobilising funding” could refer to issuing share capital of SAA to other parties; securing private equity or strategic equity partners for SAA; and approaching institutions for investment by pension funds.