Solidarity submits proposals in Velvet Sky matter after lessons with Aurora: Employees once again the biggest losers

The trade union Solidarity has today submitted several proposals about the handling of the Velvet Sky matter, following on the lessons learnt in its fight against Aurora. According to the union it is now clear that Velvet Sky is following step for step in Aurora's footsteps on account of the people involved overlapping the two entities.

Gideon du Plessis, Deputy General Secretary: Solidarity, has warned that the airline's service providers and employees should act immediately to avoid landing as creditors in the same boat as those of Aurora. This follows after the Pietermaritzburg High Court placed Velvet Sky under provisional liquidation on Friday.

The liquidation application by BP was set aside in March after Velvet Sky had announced that a mysterious foreign "investor" would possibly intervene to save the airline from its predicament. This same false promise of a foreign investor had become a monotonous strain in the Aurora saga. Moreover, as in the case of Aurora, a so-called turnaround strategy is being mooted. It is estimated that Velvet Sky already owes its service providers more than R100 million.

According to Du Plessis, Velvet Sky did not only appoint the same director and business consultants that the liquidated Aurora had done; so far their modus operandi has been almost identical.

"However, the most worrying aspect is that the lessons learnt from the Aurora debacle are still not being applied in this instance. The employees would probably be the biggest losers in the process, especially if active steps are again stalled for months on end. It has also been found, as with Aurora, that Velvet Sky does not hold any assets or capital. They owe their workers three months' salaries."

Solidarity's proposals:

• The liquidators appointed in the Velvet Sky matter should immediately apply to the High Court for the extension of their powers in order to have an insolvency questioning arranged.
• The insolvency questioning should identify all role-players involved in the fiasco behind the scenes and legal steps should be taken against them.
• In the above event, Solidarity will appeal to the Master of the High Court for a public questioning in order to have the individuals involved and their misdemeanours finally exposed so they would be barred from doing business in South Africa ever again.
• The liquidators should prosecute the directors of Velvet Sky in terms of section 424 of the Companies Act in order to hold them personally liable for the reckless management of the airline.
• The liquidators should involve the South African Revenue Service (SARS) in the investigation because, in the Aurora investigation, it was clearly revealed that the tax affairs of the people involved were not in order.
• The Velvet Sky liquidators should convene with the Pamodzi Gold liquidators and legal team and compare notes on account of the similarities between the two entities. They should also determine whether some of the missing Aurora millions had not been ploughed into Velvet Sky, especially in view of the involvement of Solly and Fazel Bhana in both liquidated entities. The Bhanas had been identified as the key persons in the Aurora fiasco, following an Aurora insolvency questioning.
• The Velvet Sky liquidators should refrain from negotiating with the airline because the latter would exploit it as a delaying tactic.
• With reference to this, creditors and claimants should refrain from entering into any settlement with Velvet Sky because Aurora had failed to honour any similar settlements, merely using it to ease the pressure on them and to frustrate the process.
• Velvet Sky employees should register their outstanding salary claims with the Velvet Sky liquidators and start looking for alternative employment without delay.
• Solidarity would gladly advise Velvet Sky employees in view of its close involvement with the lot of the Aurora employees.

Statement issued by Gideon du Plessis, Deputy General Secretary: Solidarity, May 14 2012

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