The Bull

Thursday 17

January, 2019 3:59 PM



Unhappy customers to interrupt Bestjet creditors meeting

Unhappy customers to interrupt Bestjet creditors meeting

The collapse of budget airline Bestjet has attracted plenty of criticism from across the board for a lack of preparedness regarding its finances, and with creditors convening on Wednesday to discuss who needs remunerating and in what order, customers

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By Thomas Hudson 02.01.2019

The collapse of budget airline Bestjet has attracted plenty of criticism from across the board for a lack of preparedness regarding its finances, and with creditors convening on Wednesday to discuss who needs remunerating and in what order, customers are demanding their attention.

Part of the potential scandal that might force regulators to step in is that the first individual in line for payment, Michael James, happens to be the husband of Bestjet founder Rachel James. This has naturally led to angry customers, who lost out, demanding to receive payment first.

The situation could well spill over without appropriate monitoring, and now the corporate watchdog is standing by to diffuse the issue if any chance of undermined trust in the sector could make circumstances worse.

Creditors are set to convene at Pilot Partners, the accounting company brought in by administrators just before Christmas, as they try and resolve the Bestjet issue.

One disgruntled customer, nurse Kate Ryder of New South Wales, has announced that she will be acting as the proxy holder for all of the unsecured creditors who face losing money due to the collapse of Bestjet. She instigated her move through Facebook, which shows the power of using social media to bring companies to account in some cases.

Ryder said that she and her fellow creditors have questions for Bestjet, including why it went into administration in the first place, who was accountable and how much money is at stake. She and her group, the "Bestjet Fiasco Action Group", intend to learn about the level of experience that Pilot Partners has in investigating failed travel companies.

Because one of the group's biggest outrages is that Michael James is one of three people set to receive payment first, it will ask what role he may have had in the company and its collapse and why he is set to benefit from any funds recovered ahead of Bestjet customers.

In a further twist in this saga, James was actually the boss of Air Australia, a failed airline that collapsed back in 2012. The fact that he was allowed to have any management position or level of influence at an airline so soon after that will raise many eyebrows and likely determine if regulators will choose to step in.

James received a ban from holding any senior position at a corporation for three years by the Australian Securities and Investments Commission (ASIC) after Air Australia went into administration voluntarily.

However, according to a report compiled by Pilot Partners, there is evidence to suggest that James was involved with Bestjet management procedures, which may well affect his claim as one of the priority creditors on the list.

The Australian Federation of Travel Agents (AFTA) is also voicing concerns that James was actively involved with Bestjet, which was stripped of industry accreditation in 2017. At the time, the airline took legal action against the industry body, but the court ruled against it.

ASIC said that it will investigate or intervene only when it has the full details from administrators.

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