Africa: Zimbabwe start-up Rainbow Airlines huddled by Ownership row between govt, minister and partner
Zimbabwean Minister for Information Communication Technology, Supa Mandiwanzira, has been taken to court by a fellow shareholder of local start-up carrier, Rainbow Airlines citing breach of contract.
Quoting High Court documents, NewsDay reports Frank Humbe, through his firm, Day Investments (Pvt) Ltd, has issued summons against the minister’s company, AB Communications (Pvt) Ltd, together with Rainbow Airlines (Pvt) Ltd.
Humbe said in his declaration that he had entered into an agreement with Mandiwanzira with the aim of launching Rainbow Airlines.
However, when this failed, Humbe said he concluded a concluded a sale agreement with Mandiwanzira in respect of his 700 shares in Rainbow Airlines, which constitute 70% of the airline’s issued share capital.
Mandiwanzira, through his AB Communications vehicle, was to have paid Humbe, through Day Investments, USD355,419.43. However, when Mandiwanzira failed to make the payment by on February 12, 2017, Humbe cancelled the deal. Humbe added that in subsequent discussions, Mandiwanzira’s firm made a compromise offer for the same shares, offering to pay off the full amount in monthly installments of USD10,000.
“In breach of the compromise agreement, first defendant has failed, refused and/or neglected to either pay the agreed installments or liquidate the sum in full … The first defendant has on the basis of the agreement whose terms it has not complied with taken its position in second defendant and is now solely running that entity,” Humbe said.
AB Communications has since countered Humbe’s claims stating that the talks concerning the installment plan were without prejudice and that no binding consensus was ever reached on the matter.
“The defendants further aver that the parties were and still are to reach consensus on the terms of payment as discussions are underway and have not yet yielded any binding terms. Plaintiffs are, therefore, put to the strictest proof of the alleged binding compromise.”
Rainbow Airlines declined to comment on the matter when contacted by ch-aviation.
The carrier has yet to commence scheduled passenger operations despite plans to start regular Harare Int’l-Johannesburg O.R. Tambo flights earlier this year. A CRJ-100, that was wet-leased from CemAir, has since been returned to the South African ACMI/charter operator leaving Rainbow with no known aircraft.
Meanwhile, fellow start-up Fly Africa Zimbabwe, has been given an ultimatum by the Civil Aviation Authority of Zimbabwe (CAAZ) to either commence operations or risk losing its AOC. Sources in Harare state that as of Thursday, October 12, the carrier had wet-leased a B737-500 from Africa Charter Airline to conduct an urgent charter flight ahead of an impending deadline. As with Rainbow Airlines, FlyAfrica Zimbabwe, too, has been faced with launch difficulties owing to a legal dispute between present and past shareholders over the ownership of company stock.