CALLING A SPADE A SPADE - Air Seychelles Re-visited

CALLING A SPADE A SPADE

Air Seychelles Re-visited

It has taken over 4 weeks for a non-intellect (to quote from the article “Snob’s Galore” of the “The Other Side” in “The People” of 12th April, 2007) to come to the defense of the mis-management of Air Seychelles. The article suggests that the basis of mismanagement is the need to maintain the livelihood of the Air Seychelles staff. Furthermore, within the mounted defense, fact is distorted by fiction. The pseudo-author of the article has never read the Annual Report 2005 – 2006 or again does not know how to read the award winning report.

We look at the interventions individually and begin with the issue of the MCB. On page 86 of the Annual Report titled “Corporate Data” under ‘Bankers’, only the following banks are listed: Barclays Bank Plc, Nouvobanq, Standard Chartered Bank, Habib Bank Limited and Ned bank. If we read the “Business People” article properly the Annual Report’s “Corporate Data” is wrong in not stating MCB as one of its Bankers. Who is responsible for this error? However, what this clearly shows is that the author of the article has access to information that “Le Nouveau Seychelles Weekly” and the general Seychellois public, owners of the airline, are not privy to. Furthermore, if USD 950,000 (original loan from MCB) is not “a significant volume of activity” to merit mention as a banker, then what is? “Business People” should remember that Air Seychelles primarily deals in Air Craft and any bank giving loans to facilitate this should be mentioned.

Further irony for not being mentioned as a banker is that “It (Air Seychelles) had approached bankers in Seychelles, Mauritius and UK for the loan”, there must be something seriously wrong with one of the two parties to the “favourable” transaction. Why else would other banks refuse? (Common sense being because these banks have people who can interpret accounts properly!)

Next is the use of ‘Libor Rate’. We again repeat, for the benefit of the dim-wit writing in “The People,” that Libor is an inter-bank lending rate for SHORT TERM transactions. Short term in this case means, by any stretch of the imagination, considerably less than the period over which Air Seychelles has obtained the loan. This ultra vires Libor bank loan must have some strings attached which no other bank, at the author’s own admittance, would touch. This suggestion also raises the question as to why does a company borrow long term from a bank on short term interest rates? “Business People” should explain the brainwave patterns behind this creative accounting policy. You never know; the people in Dubai may even have an award for this. There might be another US 4.5 million dollars vanishing trick in it.

Again with respect to the Balance Sheet we re-iterate that “For the Love of Seychelles” a company that is unable to pay its debts within the near future is insolvent. Insolvency is a sign of business incompetence and that it is not “well-managed”. In the real non-SPPF world, any organisation that relies on accountability, responsibility, transparency and good governance, a pay rise would not be given for leading a company into such a state of affairs. Independent auditors would agree to this assessment. People never get rewarded for making companies insolvent. The company cannot pay its debts, how can it fund a pay rise? A massive one at that. This, “Business People”, happens to only Yes-Men, well-connected airheads and sycophants who are and belong to the SPPF.

With respect to the disclosure of contingent liabilities, the answer is simple: To disclose a Contingent Liability it must be termed a Contingent Liability. “Business People” does not understand this; i.e. call a spade a spade and not refer to it as “being instruments for excavating earth”! However, on a brighter note we look forward to Air Seychelles proving us wrong. “The Truth Shall Prevail”, especially with respect to the dodgy sale of aircraft!