COMAIR may have succeeded in
winning an interdict preventing the Air
Services Licensing Council (ASLC) from
potentially revoking its licence, but the
war regarding the airline’s compliance in
terms of foreign ownership is not over.
On May 17, the Pretoria High Court
granted Comair an interdict that
“ensures continued operations”.
The interdict application went ahead
unopposed by the ASLC.
“Council is choosing to fight the
merits of the case, which is the issue
of compliance,” Andries Ntjane, deputy
director for licensing and permits of the
Department of Transport, told TNW.
At a council meeting earlier this
month, the ASLC found Comair to be
non-compliant with the Air Services
Licensing Act in terms of
its foreign ownership, which
stipulates that no more than
25% of the voting rights in a
domestic airline may be held
by foreigners.
The issue of compliance
has to do with Comair
failing to inform the ASLC of
changes in its management
plan and shareholding,
particularly with regard to
foreign ownership changes
within its largest shareholder,
Bidvest, says Andries.
Comair ascertains that it is
compliant with the Act. Ceo
Erik Venter told TNW:
“Comair is confident that it
has always been compliant
with the Act and that the
decision of the Council
has no merit.” He says the
initial complaint arose two
years ago, when FlySafair
laid a complaint with the
council, alleging that when
Comair bought back 10% of
its shares that it resulted
in a change in control and
exceeded its 25% foreign
shareholding.
He points out that when
Comair bought back 10%
of its own shares this had
the effect of increasing the
percentage of shares held
by shareholders by 10%. As
Bidvest held 26% before the
buy-back, the shareholding
then moved up to 29%.
This is still well short of the
50,1% needed for Bidvest
to become a controlling
shareholder, Erik says.
“Likewise Comair had 17%
foreign shareholding at the
time and this would therefore
increase to 17% divided by
90%, which equals 19%,
which is far from the 25%
limit. So there is no merit in
the argument of the share
buy-back.”
FlySafair then proposed
that the council look at the
shareholders of Comair’s
shareholders. That is,
the foreign shareholders
in Bidvest, as it must be
assumed they exercise
control in Comair via their
shareholding in Bidvest.
“This concept is completely
impractical when applied to
listed companies and is not
applied in the Licensing Act
or in common law,” Erik says.
The council will go to court
within the next two weeks
to contest the issue of noncompliance,
Andries says.
“We have to unpack the
matter in court so the
public can see with which
aspects of the Act Comair
does not comply. If the court
determines that the airline
does not comply with the
Air Services Licensing Act
then Comair’s licence will be
cancelled and they will not be
able to fly,” he says.
