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B N W: Biafra Nigeria World News |
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Foreign firm files suit against Virgin Nigeria
SEVEN days after its take-off plans were unfolded, the Virgin Nigeria Airlines appeared set for a crisis at least by Friday last week.
The fire this time, however, is not from Labour circles but from one of the creditors of the liquidated Nigeria Airways Limited (NAL).
In an Independence Day legal attack, Air Atlanta of Iceland on October 1, asked a Federal High Court, Lagos, to put the Virgin Nigeria pact on hold until the $10,651,467 allegedly owed it by the liquidated Nigeria Airways is paid.
The Federal Executive Council (FEC) on September 1, 2004 approved Virgin Atlantic Airlines as the strategic/technical investor for Nigeria's flag carrier.
The new flag carrier will have an equity of $50 million. The strategic/investor is to have 49 per cent of the equity, amounting to $24.5 million while Nigerian institutional investors are to have the remaining 51 per cent, amounting to $25.5 million.
The Chairman of the Virgin Atlantic, Sir Richard Brandson, and Minister of Aviation, Malam Isa Yuguda, last week Tuesday, during the signing of a Memorandum of Mutual Understanding, said the Virgin Nigeria would now take-off early next year instead of last Friday.
The new legal battle filed by Nicholas Chidi Okafor of Udo Udoma & Bello-Osagie law firm, named President Olusegun Obasanjo, Yuguda, Attorney-General of the Federation and Federal Ministry of Aviation as defendants.
Also on the list are Virgin Nigeria Airlines Limited, Virgin Atlantic Airways Limited, NAL (in liquidation) and the court-appointed liquidator, Mr. Ade Babington Ashaye.
Financial Derivates Limited, Afrijet Limited, Aviation Development Company Nigeria Plc, Bellview Airlines Limited, Chanchangi Airlines Limited and Aero Contractors Nigeria Limited are also named as co-defendants.
The Iceland-based airline is said to be the "single largest creditor" to the liquidated NAL. The plaintiff is contending that sometime on or about November 21, 2001 and March 25, 2002, it entered into two separate wet-lease agreements with NAL for wet-lease of two aircraft - a Boeing 747-300 series and Boeing 767-204 ET.
The liquidated airline failed to meet its financial obligations to the plaintiff, although the troubled Nigerian acknowledged the debts that arose out of the contract on March 26, 2003 in a statement titled: "Nigeria Airways/Air Atlanta Icelandic - Final Reconciliation Summary."
The foreign lessor is afraid that "if NAL is stripped of its assets, it shall be unable to pay its creditors in full in fulfilment of its obligations under the Declaration of Solvency registered with the Corporate Affairs Commission on or about August 22, 2003 when NAL was under the supervision of the Federal Ministry of Aviation."
The plaintiff noted that if the Virgin Nigeria project takes off, the revenue like $250 million to be realised yearly from international routes without any of its aircraft will be diverted to the new airline, hence the hope of recovering its money will be further dashed.
The Icelandic company also argued that four subsidiary companies established to provide additional funds to NAL were not fully utilised, apart from royalties on commercial agreements and Bilateral Air Services Agreement (BASA).
The subsidiaries are Skypower Aviation Handling Company Limited (SAHCOL), Skypower Hotel and Catering Service Ltd, Skypower Properties Limited and Skypower Printing and Publishing Company.
It also stated that following government's report prepared by KPMG Professional Services, at the instance of the Federal Government, over $4,566,639.85 owed by Air France, Middle East Airlines, Swiss Air, Lufthansa, KLM and Lufthansa to NAL were paid but "cannot be traced to any account, including $31,793,279 paid by KLM Royal Dutch Airlines to NAL."
Air Atlanta Icelandic also referred to the over $400 million and N300 million discovered missing by the Justice Obiora Nwazota commission that probed all the past management of NAL as another source of insolvency of NAL.
The plaintiff asked the court to compel the Federal Government to pay it $10,651,467, being the arrears of unpaid rent on the wet-leased aircraft.
Besides, it sought for an order that President Obasanjo and other defendants are not entitled in law to take over, manage, exploit, appropriate and control the assets of NAL except all the creditors, including itself.
It urged the court to issue an order of perpetual injunction restraining the Federal Government from launching a new national carrier and that Virgin Nigeria Airlines and Virgin Atlantic Airways should not replace the Nigerian Airways Limited until all its money are paid.
It sought an order of mandatory injunction directing Obasanjo, Yuguda, the Attorney-General of the Federation, among others, to pay all monies recovered by the government through the implementation of the White Paper on the Judicial Commission of Inquiry for the investigation of the management of Nigeria Airways.
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