Friday, January 23, 2009

(DAILY MAIL) State to sue Zambian Airways

State to sue Zambian Airways

GOVERNMENT says it is considering taking legal action against Zambian Airways to see how it can recover money the firm owes various firms.

Among institutions Zambian Airways owes include National Airports Corporation (NAC), Zambia Revenue Authority (ZRA), National Pensions Scheme Authority (NAPSA) and Development Bank of Zambia (DBZ). Zambian Airways owes several institutions a staggering US$29 million (about K150 billion).

And the State has maintained that it would not bail out Zambian Airways following the suspension of its operations due to financial problems.

This came to light when Minister of Communications and Transport, Dora Siliya presented a ministerial statement in Parliament yesterday.

“I am talking with my colleagues at the ministries of Finance and Justice to see how we shall recover these monies but legal proceedings have since commenced against the airline because Government institutions are owed money which we can channel to development projects such road rehabilitation and up-grading of hospitals,” Ms Siliya said.

Ms Siliya said Government had rejected a proposal that the State purchased shares in Zambian Airways.

Ms Siliya said Government regretted the suspension of Zambian Airways’ operations, but said the strategy plan the airline had given Government was not in the best interest of the country.

Ms Siliya said Government rejected the proposal because it was going to be based on political decisions rather than a business strategy.

“We did not want to put Government’s good money with bad money for the purpose of serving certain people, so we rejected it.

“I was always advising management at the airline to come up with business strategies rather than wanting to survive as a result of political decisions,” Ms Siliya said.

The Minister also told Parliament that information obtained from the Patent and Company Registration Office (PACRO) revealed that the Nchito brothers, Mutembo and Nchima had 50 per cent shares each, contrary to information at the Ministry of Communications and Transport, which indicates that JCN holdings has 57.5 per cent, Post Newspapers 30 per cent and Seaboard of United States of America 12.5 per cent.

Ms Siliya said Zambian Airways was not a member of the International Air Transport Association (IATA) as the airline did not meet required conditions for it join the association.

“There was a serious oversight on the part of the director of aviation because the information I have is that they could not do anything (to correct the situation) because there was pressure from someone.

“This airline was not even remitting taxes to statutory bodies despite passengers paying in full,” Ms Siliya said.

She said Government would continue to put measures in place aimed at attracting investors to the airline sector to mitigate looming job losses at Zambian Airways.

She said Government would enhance issuance of air permits to protect and provide alternative travel arrangement for passengers.

And Ms Siliya told Parliament that 41 Zambian passengers were stranded in Johannesburg, South Africa after the airline suspended its operations.

But several MP’s wondered why government had continued to allow Zambian Airways to operate despite the financial problems the company was facing.

PF Luapula MP Peter Machungwa wondered why Government allowed the airline to operate despite not meeting international requirements such as being a member of IATA.

UPND Sinazongwe MP Raphael Muyanda asked why the company had different details of shareholders at PACRO and at the Ministry of Communication and Transport.

UPND Kalomo MP Request Muntanga appealed to Government to constitute a commission of inquiry to investigate what led to the airline to suspend operations despite the loans it got from banks.

“I think there is need for a body of inquiry so that we can see what exactly happened to Zambian Airways because the money they owe is too much,” Mr Muntanga said.

The airline owes ZRA US$2 million, DBZ US$4 million, NAPSA US$2.5 million, NAC US$2 million, Investrust Bank US$1 million, Intermarket Bank US$1.5 million, Finance Bank US$ 6.8 million and Trade Creditor US$ 9.5 million.

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