An irregular move
The grounded airline put up a website last month on which it offered 1,500 shares at R100,000 each and gave potential investors three days to buy in without first viewing Skywise's share prospectus - a contravention of the Companies Act.
FSB deputy executive officer for investment institutions Bert Chanetsa described the move as irregular because a company is prohibited from asking for money before investors have seen its prospectus.
Skywise spokesman Martin Chemhere said the airline had dropped the capital-raising exercise after it had been dismissed as the "joke of the year. If you are going straight to the people to find out if they will actually come forward, what is so funny about it? By leveraging technology, massive opportunities could be created." South Africans do not yet know the "potential power of crowdfunding", wherein cash is raised for a business venture through an online platform, he said.
The airline's attempt to raise capital came after Airports Company SA grounded its flights because of R4m in unpaid service fees. It owes another creditor R4m. The cash-strapped airline is now contending with refunding disappointed passengers.
Chemhere did not respond to questions about refunds, but some of the country's largest banks have begun processing refunds for customers who made bookings using credit cards. The banks will release these refunds only after a dispute has been lodged, an investigation concluded, and if Skywise is unable to prove it rendered the service - presenting an administrative nightmare for passengers.
Chris Wood, Nedbank's head of emerging payments, strategy and regulation, said the bank had processed disputes for affected cardholders in line with the Banking Association of SA's rules. "Nedbank does not wait until formal liquidation," he said. "If customers have followed the dispute process for services not rendered, the bank will reimburse accordingly." He was unable to disclose how many disputes Nedbank had processed.
Gareth Rimmington, operations head at First National Bank's (FNB's) credit card division, said FNB would not suffer losses, in terms of its agreement with Skywise. "The funds could be reversed on the merchant's account based on the resolution of the dispute. If any FNB customers have been affected, they can apply to the bank and we will facilitate a refund."
Source: Business Day
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