Fly Africa squabbles take new twist

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Local Fly Africa shareholders Nu Aero Pvt Limited, have accused their foreign partners, FlyAfrica.com of externalising money from the business, in a sensational twist to squabbles that have rocked the airline. Fly Africa director Mr Matipedza Karase last week confirmed the allegations, saying the matter was now before law enforcement agencies. “We have since caught up with the modalities of how they managed to externalise the funds and that piece of evidence has been given to the investigating agencies to which we have reported the matter as of 21st October 2015,” he said.

Mr Karase revealed that Fly Africa made several wire transactions to countries such as South Africa and Dubai without the knowledge of the local shareholder. Despite remitting the money to foreign accounts, the company failing to meet its tax obligations and currently owes about $2 million to its regulator the Civil Aviation Authority (CCAZ), Zimbabwe Revenue Authority (ZIMRA) as well as the National Handling Services (NHS).

Of the amount $1,4 million is owed to CAAZ, while $643 000 is outstanding to NHS and an unconfirmed amount is owed to Zimra. In a report by Mr Karase, failure by Fly Africa to service its debts was attributed to externalisation of funds for the business.
“This externalisation is a serious matter in that it involves monies and taxes collected on behalf of the Government of Zimbabwe and should have been surrendered to either CAAZ for airport departure and passenger service fees, VAT on ticket local sales, PAYE and National Handling Services for services rendered to the aircraft, but was instead, siphoned out of the country,” he said.

Eyebrows have been raised after Fly Africa’s CEO and foreign shareholder Mr Adrian Hamilton–Manns was quoted by a South African publication indicating that he intends to sue the local shareholder of R56 million over loss of business. With Fly Africa having been grounded on October 27, Mr Hamilton-Manns legal suit suggests that the airline made business of about R10 million per week.

In a November 16 judgment at the High Court, Justice Emmy Tsanga refused to grant a request by the foreign shareholders to uplift the suspension of the airline. The airline was requested to follow a CAAZ directive to “put its house in order”.

Justice Tsanga also interdicted Fly Africa chairman and 51 percent shareholder Mr Chakanyuka Karase from acting “unilaterally” in matters concerning the business of Fly Africa. Fly Africa airline was grounded after Mr Karase surrendered its Air Operators Certificate over the ongoing squabbles that saw the foreign shareholder accusing the Karase family of $140 000 fraud.

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