THE directors of the collapsed Fly365.com online travel agency (TD 24 Feb) have been accused of authorising “uncommercial transactions” worth more than $6.25 million in the final days of the company.
Administrators Vincent Pirina and Ian Niccol of Aston Chace Group have also confirmed they are liaising with major creditors and stakeholders – believed to include the Australian Federation of Travel Agents (AFTA) – in relation to obtaining funding to commence public examinations against Scott Mayne and Mustafa Filizkok to “gather evidence which may be used in subsequent civil and criminal proceedings”.
The Second Report to Creditors, released last week, confirms the administrators have investigated allegations of the company’s manipulation of airline bookings to delay the issuance of tickets (TD 28 Feb), looked into claims the Directors misappropriated customer funds, and reported fraud allegations to the Australian Securities and Investments Commission.
The report also notes that AFTA had notified Fly365 of its intention to cancel the company’s ATAS accreditation in Dec last year due to a range of issues including failure to resolve customer disputes and non-supply of financial records for the prior financial year.
However in Jan AFTA accepted a further submission from Fly365 and issued an invoice for its ATAS renewal fee.
In Feb the company began receiving email demands for repayment of overdue debts from Air Tickets, Express Travel Group and CVFR, and subsequently its directors resolved to have a liquidator appointed.
Fly365’s ownership is complex, with its holding company, ADG EnerTech Limited, based in Hong Kong and with shareholders in the British Virgin Islands.
The Administrators believe the company collapsed due to poor strategic management, as well as “high cash use” after identifying payments to related parties worth $6,252,723 – of which $5.5m was transferred just a few days before Fly365 ceased trading.
Unsecured creditors of Fly365 are estimated to be owed almost $27 million – including $18 million to the Commonwealth Bank, $3.1 million to Helloworld Travel offshoot Air Tickets, $2.6 million owed collectively to 957 customers, $2.27 million owed to credit card processor Ingenico, $358,000 to SkyScanner and $201,000 to Kayak.
The Administrators have not been given access to the Fly365 software so have been unable to process refund requests, confirm the status of bookings or facilitate any changes, while airlines and consolidators have been reluctant to provide customer details to assist, due to privacy concerns.
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Source: traveldaily