Search is on for SA Express’ missing millions

The SA Express joint provisional liquidators have instituted an investigation to find any traces of reckless trading, misappropriation of funds and non-statutory payments by the airline’s previous board of directors.

The investigation will look into the airline’s transactions prior to it being placed under provisional liquidation in April.

If found that SA Express continued to trade under insolvent circumstances or that the previous board presided over dodgy dealings at the airline, the directors could be found guilty of reckless trading under the Companies Act.

Section 417 and 418 of the Act allows the Master of the High Court, or the courts, to look into the affairs of an insolvent company and to summon, for questioning, any director, officer or any other person suspected of being in possession of information relating to the company.

Those summoned may be asked to give evidence about their knowledge of the insolvent company’s trade, affairs or any other dealings that may have indebted the company.

“During the course of our investigation if we find that there was something untoward in relation [to any] specific transaction, we have the power to set aside the specific transaction and recover any benefit derived from either the company or an individual associated with that transaction,” provisional liquidator Aviwe Ndyamara said.

The inquiry was prompted by, among others, investigations into fraud and corruption by state authorities, as well as various request from stakeholders with allegations of misappropriation of funds or reckless trading.

“The inquiry into the airline’s previous transactions is a way for creditors to recover any lost funds,” said Ndyamara.

SA Express has been a underperformer over the past few years, even failing to pay employee salaries since March.

In February, it had a debt burden of R11.3 million and was placed under business rescue and provisional liquidation in April.

The liquidators subsequently accepted a bid from worker-owned company Fly SAX to buy the airline, but this deal has not yet been finalised.

This article first appeared on Moneyweb and was republished with permission.

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