The exercise is flawed, and a false start was made when the restructuration plan was entrusted to accountants and not to a dedicated firm of experts in the field of Commercial Aviation. I drew the attention of Government and on 29/4/20 asked the Director of Insolvency Services for an inquiry into the appointment of Sattar Hajee Abdoula (SHA) as voluntary administrator of Air Mauritius. The appointment of Mr. A. Sattar Hajee Abdoula (“SHA” and/or Mr. Abdoula), CEO of Grant Thornton Mauritius and Chairman of SBM Holdings Ltd as one of the administrators of Air Mauritius Ltd (“MK”) on 22 April 2020 at 14:00 (Mauritius Time), pursuant to Sections 215 and 216 of the Insolvency Act (“the act”) has been widely publicized.
As of now there has not been an in-depth study of the state of affairs of Air Mauritius. The latter has to stand on its own and cannot be part of a megastructure, which may be a precursor to a Ponzi-like scheme. It’s short-term gain for long term pain. Some people, with tongue in the cheek, are saying why not rope in MT in the structural layout since it is revenue generating and makes handsome profits. A responsible government would have acted diligently right from the outset and appointed experts of the likes of MCKINSEY to make the in-depth swot analysis. Time and seriousness of purpose has never been the essence of this Government.
The culprit remains the PM, who praised Air Mauritius as being sound financially. It was probably stated to justify the acquisition of four new aircrafts. Yet against all odds the regime has disposed of 4 carriers at giveaway prices (2 A340 to be dismantled for sale of spare parts, 2 A319 carriers and negotiations for sale of A330 carrier are ongoing). Am I to believe that the two Administrators voluntarily sold the aircrafts and parts for EUR 5, 258,801 or is it false information from a vicious tongue? I have referred to the table on the receipts and payments for the period 23/4/2020 to August 2021 at page 23 section 7 of the report.
Three years ago, Rs 1 billion was spent to refurbish the four planes which had been disposed of at a giveaway price. A waste for taxpayers but windfall gains for those who are fleecing taxpayers? Closure of frontiers and grounding of commercial flights against backdrop of COVID pandemic were used as arguments to ashamedly make a fire-sale. Why rush in like fools?
Notwithstanding the Rs 12 billion being forked out by taxpayers from the Consolidated Fund, the Rs 270 million could have come from the Mauritius Investment Corporation if there was an emergency to disburse money to creditors.
What’s new?
A human drama has been unfolding and the appointment of Sattar Hajee Abdoula was controversial. However, he was right to point out that the Prime Minister was wrong when the latter stated to the press that Air Mauritius had become a solvent company after he renegotiated the deal in relation to the lease of six aircraft simply to justify the false move of Air Mauritius to purchase two A 350 planes. The acquisition was unnecessary and uncalled. In desperation they were then leased in 2019 to South African Airways, an insolvent company. The Court of Pretoria ruled that its CEO of that company was delinquent and should not be seen nor heard of as a reliable Executive Officer.
Controversial Choice
Mr. Abdoula, incidentally or coincidentally is also a political nominee of the main shareholder of MK on the Board of SBM Holdings Ltd (the subsidiary, SBM Bank (Mauritius) Ltd, being one of the main bankers of MK as disclosed in various publications by the Stock Exchange of Mauritius). MK in voluntary administration has too far-reaching implications for: (i) the State of Mauritius; (ii) the travel and tourism sector with a multi-verse and multi-sectorial impact; (iii) some 12,000 equity investors whose investments in hundreds of millions are at great stake; (iv) the 2441 direct employees of MK and their resulting families; (v) the 12,000 indirect jobs and the livelihoods which are today at stake; (vi) the creditors and other stakeholders.
The Watershed Meeting
The watershed meeting is scheduled for the 28/9/21 and creditors would not opt for lose-lose scenario. They will say yes to a decent haircut. Is it the 65% cut? Long-term gain matters and the best option is a business model based on a genuine strategic partnership. Decency should start at the level of the regime which is keen for a scoreboard on governance, transparency and accountability. The Chairperson of the committee Ms A. Radhakeesoon will release the findings of the study on the 28/9/21. A watershed coincidence indeed.
As a nation we have to save our flagship. The voluntary administrators cannot have their cake and eat it.
Unfortunately, with no time limit to come up with firm proposals and abusive practices of voluntary administration in relation to exorbitant fees claimed, the regime has no right to circumscribe Air Mauritius into a megastructure to be managed by an errand boy at the expense of taxpayers. The creditors and shareholders should not be bystanders. They have to stand up and opt for a business model where the decision-making process is not lopsided in favour of the regime. Liquidation of Air Mauritius is not an option. It means loss of acquired rights and no grandfathering of existing rights and code share.
Be careful, the option of acquisition by Qatar Airways has not been ruled out. A new company may be set up and will look for strategic partners. Qatar wants to counteract influence of UAE and par ricochet Saudi Arabia in the region. It has heavy investment in Mozambique and Rwanda.
The creditors have guaranteed sovereignty rights. Taxpayers’ money from consolidated will be a hefty Rs 12 billion and the delisting is temporary. Open the frontiers and err on principle of caution.
The People have already spoken – they want their flagship to flap its wings to greater destination.
Let us unite and put up a common front to save our flagship. It’s freedom at large. It has resilience and the nation is watching.
Even against the backdrop of Covid the family heirloom is not for sale, Mr Pravind Jugnauth.