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Thread: Canadian banks application to ground Gupta jet expected to be heard on Tuesday rep

  1. #16
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    Lengthy updates from court proceedings: https://www.news24.com/SouthAfrica/N...court-20180309

    17:45
    Judgment has been reserved.
    16:18
    Bhana says the applicants can't think away the fact that the matter is already in another court. Bhana says it would've been more convenient to go to another court.
    15:01
    Cook says one of the other issues being raised is that they are a flight risk. He says it's nonsense, because you can't talk about flight risk if the plane is out of the country. "If the plane is not here, it is inadmissible."
    14:47
    Judge Kathree-Setiloane asks why the resistance to ground the aircraft? Cook says the last thing you want to do is ground an airplane and put it in a hangar. Says it will depreciate quicker.

    Judge Kathree-Setiloane disputes Cook's assertion and makes comparisons between the aircraft and motor vehicles being left in storage and properly maintained.
    14:44
    Adv Owen Cook: it seems one of the brothers is not in SA, so he doesn't need the aircraft.

    Judge Kathree-Setiloane jokes: Unless it's dropped him off wherever he is.

    — POWER987News
    14:03
    Cook said it was ironic that the EDC would refer to reputational damage. He reads from a newspaper article referring to the Gupta family and their controversy, as well as EDC's controversies of loaning money to scandal-ridden individuals around the world.
    13:58
    EDC entered into the agreement during April of 2015, and that was exactly two years after the controversial Waterkloof landing and the infamous Gupta wedding.

    13:57
    Cook says there's a great irony in the approach adopted by the applicants, particularly the EDC.
    12:47
    Cockrell says his clients wants the court to make a decision to direct the plane to Lanseria or an airport in the UK - in the first instance, to the airport in the UK.

    The Guptas will just have to bear the costs of returning the airplane to either airport, and thereafter lose all rights to the airplane.
    12:30
    The tracking device is there, Cockrell says. "The question we're asking is why have they switched off the tracking device and they don't answer that... The inference my client is making, is that they have switched off the tracking device for unlawful purposes," Cockrell says.

    12:29
    Cockrell on the aircraft being used by the Guptas: "The public tracker has been switched off."

    Cockrell says the Guptas have said it's not unreasonable to switch off the tracking system. But they give no reason why they say that. From his client's perspective, it places them in a position to suffer damages.
    Last edited by Gordon_R; 09-03-2018 at 05:48 PM. Reason: Updates.

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    Why are the lawyers arguing reputational damage and such crap? Loan has been defaulted. Property must be returned. End of story no? This isn't their only RDP home and if they are kicked out they will live on the streets and be raped and tortured. This is a luxury damn plane.

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    Quote Originally Posted by ambroseg1 View Post
    Why are the lawyers arguing reputational damage and such crap? Loan has been defaulted. Property must be returned. End of story no? This isn't their only RDP home and if they are kicked out they will live on the streets and be raped and tortured. This is a luxury damn plane.
    I don't know the details, but it is possible the plane was not listed as surety, or there are jurisdictional issues, with the bank being based in Canada and the company in SA. This specific case revolves around urgency and (permanent) seizure of an asset. Lawyers can play games for years in this sort of situation...

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    Quote Originally Posted by Gordon_R View Post
    I don't know the details, but it is possible the plane was not listed as surety, or there are jurisdictional issues, with the bank being based in Canada and the company in SA. This specific case revolves around urgency and (permanent) seizure of an asset. Lawyers can play games for years in this sort of situation...
    Unbelievable that EDC would not do due diligence and make sure something like a plane can be returned if defaulted on by hundreds of clauses in the loan contract. Suppose they have themselves to blame.

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    Quote Originally Posted by ambroseg1 View Post
    Unbelievable that EDC would not do due diligence and make sure something like a plane can be returned if defaulted on by hundreds of clauses in the loan contract. Suppose they have themselves to blame.
    Canadian taxpayers are probably asking similar questions. Bombardier are also linked to the Guptas via dodgy Prasa locomotive deals: https://www.theglobeandmail.com/repo...ticle38230152/

    Lots of details about how desperate they were for the sale to go through:

    The Globe and Mail reported last year that Bombardier sold the airplane to the Guptas for US$52-million, nearly 20 per cent below the list price. The Canadian company first offered the discount to the Guptas in February, 2014, just a month before the locomotive deal was announced. Bombardier says the two deals are not connected. It also says the discount was a normal practice in the business-aircraft market.

    Leaked e-mails obtained by The Globe show that a vice-president in Bombardier's aircraft division, Trevor Lambarth, flew to Johannesburg and visited Ajay Gupta in early 2014.

    Shortly after the meeting, a Bombardier sales director contacted the Guptas to offer them a Global 6000, the company's top-of-the-line corporate jet. He promised to help them secure "the best-priced Global in the market."

    In an e-mail to Ajay Gupta on Feb. 18, 2014, Mr. Lambarth laid out the terms of Bombardier's aircraft offer. In addition to the discounted price, he offered two credit memos, worth US$1.35-million, and free training sessions for the jet's pilots.

    Perhaps most crucially, he assured Ajay Gupta that there were "suitable finance offers" to ensure that the Guptas would not need to provide cash for most of the purchase price. Bombardier then persuaded the federal government's export bank, Export Development Canada (EDC), to provide a loan to the Guptas for 80 per cent of the jet's price.

    Bombardier, however, was interested in more than just aircraft business with the Guptas. At the end of his e-mail, Mr. Lambarth suggested Bombardier could co-operate with the Guptas in the infrastructure sector if the jet deal was completed. "We hope that a successful conclusion will lead to further opportunities for our organizations to explore working together, whether on infrastructure or aviation-related business," he told Ajay Gupta.
    Almost exactly a month later, on March 17, 2014, Transnet announced that Bombardier would receive one-quarter of one of the biggest infrastructure contracts in South Africa's post-apartheid history: a US$5-billion contract to supply 1,064 locomotives. The contract was partly financed with a US$450-million loan from Export Development Canada.

    The price of the locomotive contract was dramatically larger than earlier estimates. The contract – which was divided among Bombardier, General Electric and two Chinese companies – was almost 40 per cent more expensive than the amount recommended by an independent consultant, McKinsey & Co., just a few months earlier.

    Asked about the price increase, a Bombardier spokesman said the locomotive price was adjusted purely because of "commercial conditions" Transnet imposed.

    South African media, citing leaked e-mails from the Guptas, have reported that a Gupta-linked company received about US$320-million in "consulting fees" as part of a Chinese company's share of the locomotive deal. These fees amounted to 20 per cent of the value of the Chinese share of the contract, the reports say.

    Investigations by South African media and independent inquiries have documented how Transnet had fallen under the heavy influence of the Guptas by 2014. At the time of the locomotive contract, the Guptas enjoyed substantial power over Transnet through their allies on the company's board of directors and the highest ranks of its management.

    Brian Molefe, a prominent friend of the Guptas, was appointed as Transnet's chief executive officer in 2011. He remained at Transnet until March of 2015, when he moved to a similar job at Eskom, the state-owned electricity monopoly.
    Lots more, worth reading...

    P.S. I didn't realise how expensive these private jets are, almost 2/3 the price of an A320 180-seat passenger jet...
    Last edited by Gordon_R; 09-03-2018 at 03:26 PM. Reason: Add text.

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    Brilliant info. Thanks Gordon

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    And so the Gupta rot eats away at people's reputations...
    500th anniversary of the Protestant Reformation has passed.

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    Some other reported details from the case: https://www.timeslive.co.za/sunday-t...und-gupta-jet/

    If the Guptas refuse to surrender the jet the EDC has asked South Africa’s Civil Aviation Authority (CAA) to deregister the aircraft‚ which effectively means it will not be able to fly anywhere in the world. The CAA is not opposing the application.

    The EDC issued the Guptas with a termination notice on December 13 after it stopped making repayments and breached several loan covenants. These included the failure by Gupta company Oakbay Investments‚ the corporate guarantor of the loan‚ to furnish the EDC with its annual financial statements.

    Atul and his wife Chetali Gupta also personally stand surety for the loan. When the loan agreement was signed in 2015 Atul Gupta was listed as chairman of Oakbay but he resigned in October 2017. The EDC regards this‚ as well as Oakbay’s plans to dispose of its companies Infinity Media and Tegeta‚ as further breaches of the agreement.

    Other breaches cited by Cockrell include the delisting from the Johannesburg Securities Exchange by Oakbay Investment’s subsidiary Oakbay Resources after the company lost its sponsor and most of its bank accounts were closes.

    “That is a material adverse change‚ on any reading‚” said Cockrell.

    In an affidavit filed in the court proceedings Gupta executive Ronica Ragavan said the Guptas were entitled to fly their jet around the world because the bank had unlawfully terminated the agreement.

    The Guptas wanted to make loan repayments to the EDC but the bank had cancelled its lease with Stoneriver‚ a company in Ireland that holds the loan.
    As I suspected, aircraft lease agreements are often done in 3rd party countries (for tax reasons), making jurisdiction complex.

    Posturing on both sides...

    The Guptas had offered to exercise their right to end the lease and buy the aircraft but hadn’t received a response from the EDC. Ragavan said their offer would be accepted if the EDC was “truly interested in their commercial interests‚ rather than some unspecified political agenda which they now seem to harbour against the Guptas”.

    Ragavan said that as a result the Guptas were “entitled to continue the enjoyment of the full spectrum of rights granted under the lease agreement”. She added that the EDC’s case for urgency was “self-created” because it was based largely on the reputational damage the bank suffered from its business relationship with the family‚ who’d been implicated in several corruption scandals. Ragavan pointed out that these scandals had been widely publicised since 2013‚ including in Canada. Yet the EDC had taken no steps to distance themselves from the Guptas. Instead the bank continued to enjoy “a commercially beneficial relationship” with the family until its termination notice was sent in December 2017 and its urgent application lodged in February this year.
    Later in February the Reserve Bank confirmed that the Bank of Baroda‚ the last bank that served the Guptas‚ would be leaving South Africa. Then‚ on February 14‚ the Hawks raided the Gupta compound in Saxonwold‚ Johannesburg. “The urgency was created by this cascading sequence of events‚” Cockrell said.

    The EDC launched its urgent application the following day.

    The EDC had therefore “established a prima facie case of default and a prima facie right for interim relief”‚ Cockrell said.

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    Court judgement: https://www.news24.com/SouthAfrica/N...unded-20180319

    The South Gauteng High Court in Johannesburg ruled on Monday that a Bombadier Global 6000 aircraft, which the Gupta family was leasing, must be handed over to the applicants and stored at Lanseria Airport in Johannesburg.

    The court also interdicted the family and its companies from using the aircraft.

    Export Development Canada (EDC), which operates as an export credit agency, and Stoneriver brought the application against the Guptas over a lease agreement relating to the Bombadier jet valued at $41m.

    The Guptas have a lease agreement with EDC for the aircraft, registered as ZS-OAK, but are currently engaged in a court dispute in the UK over the agreement.

    EDC had asked the court in South Africa to ground the plane, until a final order was made, and to prevent its movement while the tracking system was switched off.
    Presumaly the Guptas don't care, but it will now be harder to move the jet around...

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    Quote Originally Posted by Gordon_R View Post
    Court judgement: https://www.news24.com/SouthAfrica/N...unded-20180319



    Presumaly the Guptas don't care, but it will now be harder to move the jet around...
    So basically the plane cannot come to SA anymore.

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    Quote Originally Posted by ambroseg1 View Post
    So basically the plane cannot come to SA anymore.
    Not that it would, not with arrest warrants out for the Guptas.
    #CTDM

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    Quote Originally Posted by ambroseg1 View Post
    So basically the plane cannot come to SA anymore.
    There are international aviation agreements: https://en.wikipedia.org/wiki/Aircraft_registration

    In accordance with the Convention on International Civil Aviation (also known as the Chicago Convention), all civil aircraft must be registered with a national aviation authority (NAA) using procedures set by each country. Every country, even those not party to the Chicago Convention, has an NAA whose functions include the registration of civil aircraft. An aircraft can only be registered once, in one jurisdiction. The NAA allocates a unique alphanumeric string to identify the aircraft, which also indicates the nationality (i.e., country of registration) of the aircraft, and provides a legal document called a Certificate of Registration, one of the documents which must be carried when the aircraft is in operation.
    The next step is to deregister the plane (ZS-OAK is registered by the SA CAA), then it cannot (legally) fly anywhere in the world.

    Edit: Its like driving a motor vehicle without a licence and roadworthy, except taken much more seriously, because of the legal liability involved in plane crashes. No legitimate pilot will ever fly an unregistered aircraft.
    Last edited by Gordon_R; 19-03-2018 at 12:33 PM. Reason: Add text.

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    Quote Originally Posted by Pox View Post
    Not that it would, not with arrest warrants out for the Guptas.
    Yip. Sort of a useless judgement.

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    Quote Originally Posted by Gordon_R View Post
    There are international aviation agreements: https://en.wikipedia.org/wiki/Aircraft_registration



    The next step is to deregister the plane (ZS-OAK is registered by the SA CAA), then it cannot (legally) fly anywhere in the world.

    Edit: Its like driving a motor vehicle without a licence and roadworthy, except taken much more seriously, because of the legal liability involved in plane crashes. No legitimate pilot will ever fly an unregistered aircraft.
    As usual great info Gordon. Was not aware of the above. Does the judgement say the plane must be de-registered if not returned to Lanseria with x amount of time though??

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    Quote Originally Posted by ambroseg1 View Post
    As usual great info Gordon. Was not aware of the above. Does the judgement say the plane must be de-registered if not returned to Lanseria with x amount of time though??
    The lender EDC will apply to the SA CAA for deregistration, on the basis of the court judgement. That is quoted in the Times Live article I linked earlier:
    https://www.timeslive.co.za/sunday-t...und-gupta-jet/

    If the Guptas refuse to surrender the jet the EDC has asked South Africa’s Civil Aviation Authority (CAA) to deregister the aircraft‚ which effectively means it will not be able to fly anywhere in the world. The CAA is not opposing the application.
    Edit: Another link: https://mg.co.za/article/2018-03-19-...to-be-grounded
    Last edited by Gordon_R; 19-03-2018 at 12:44 PM. Reason: Add link.

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