Board plan approved amid claims ruling creates a worrying precedent
The Mango airline board won out in the battle over the business rescue process at the embattled carrier with the
Sacca president Zazi Nsibanyoni-Mugambi said the ruling “has the potential to block other legitimate business rescue processes that a creditor could choose to institute”. At issue for the three unions is that Mango, which had on April 16 passed a resolution recommending business rescue, had held onto this resolution for three-and-a-half months before trying to submit its business rescue proposal on July 28.
Mango’s own proposal was initially rejected by the Companies and Intellectual Property Commission on the grounds that an application to be placed in business rescue must be filed five days after a board resolution to do so. Mango then added the CIPC as a third party for the hearing.“Mango basically passed their business rescue resolution on April 16, and has sat on it for three-and-a-half months, and so it could open up a can of worms for the business rescue process in SA in the future.
She said the judgment, which effectively ruled in favour of Mango’s own business rescue application, opened the way for abuse of the business rescue system in SA.
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