Customers who bought tickets for the grounded Velvet Sky airline have little chance of being refunded.
The troubled airline was placed under provisional liquidation in the Pietermaritzburg High Court yesterday.
Presiding Judge Shyam Gyanda dismissed a second application by Umzamo Transport Services to grant permission for a business rescue plan to be implemented.
He said the application provided scant detail and might be a ploy to delay liquidation proceedings.
On March 7, Umzamo of Avoca Hills in Durban claimed that Velvet Sky owed it more than R3.9 million. The court heard then that Velvet Sky owed almost R100m to its creditors.
Velvet Sky executive officer Dhevan Pillay said that daily expenses could be met if possible foreign investors provided funds and if there was cost-cutting.
Major fuel companies had stopped supplying fuel to Velvet Sky because bills weren’t being paid and, in February, BP SA launched an application for provisional liquidation.
Last night Glenda Zvenyika, BP’s spokeswoman, welcomed the court’s decision.
“We are glad that the law has taken its course,” she said.
Consumer website Hellopeter.com have received hundreds of complaints from customers about refunds but Velvet Sky officials have failed to respond.
Last month customers who had booked through Computicket Travel were refunded their air fares.
The company was under no legal obligation to refund the tickets, but would reimburse the R2.2m worth of Velvet Sky tickets purchased at any Computicket outlet in Checkers or Shoprite stores.
Gideon du Plessis, the deputy general secretary of Solidarity, said the trade union was pleased by the outcome.
“We’re very pleased because the modus operandi of Velvet Sky and Aurora Empowerment Systems was exactly the same. I’m glad the legal system stopped them in their tracks. But we’re very disappointed they were allowed to repeat what they did at Aurora – the same people were allowed to repeat that kind of chaos and unlawful conduct. Hopefully the liquidators of Velvet Sky and Aurora can share notes on how to deal with these people.”
Aurora was headed by Khulubuse Zuma, Jacob Zuma’s nephew and Nelson Mandela’s grandson, Zondwa. In 2009, it was chosen as the preferred bidder to purchase the assets of liquidated Pamodzi Gold, but liquidators kicked them out last year. Ahmed Amod, Aurora’s legal consultant, is a director of Velvet Sky, while the failed airline’s business consultants include Thulani Ngubane, commercial director of Aurora, Solly and Fazel Bhana, who are behind the collapse of the Pamodzi mines, and Tony Chammas and Yaseen Theba, who did marketing work for both companies.
Pamodzi Gold’s liquidators have revealed how Aurora was used by its directors and the Bhanas to gain control of the mines and strip its infrastructure.
Liquidators are now suing the insolvent estate of Aurora for 1.7 billion, and probing R120m in missing gold.
“Compared to Aurora, the situation is not as bad,” said Du Plessis, referring to the around R100m debts Velvet Sky owed its creditors. “But if you take it in isolation, this is another major corporate scandal. And it’s the same people as Aurora.
“I wouldn’t be surprised if some of the money that disappeared under Aurora’s slide were used to obtain the rights and commence business operation on Velvet Sky’s side.”
Ngubane said last night that he had a “minimal” role in the company, but was adamant there was hope to restart the troubled carrier.
“A provisional liquidation means that anyone can still rescue the company. It’s not final liquidation.”
He blamed the costing for the business to “be all wrong”.
“For us, it would have cost R42 000 from Durban to Joburg per trip. But when we re-checked the figures it was R110 000 a trip. Whoever did our costing never did it right.”
Ngubane said, however, that customers were being refunded. “Some people got their money back, that’s a positive situation.” – Additional reporting by Sapa