‘Allan Gray’ almost stops Comair
THOUGHT COMPANY NAME WAS SOMEONE WHO EXCEEDED AIRLINE SHARES LIMIT Allan Gray may be SA’s biggest fund manager, but that doesn’t mean aviation officials have heard of it ...
Fund manager Allan Gray (Pty) Ltd’s shareholding in Comair nearly caused the airline’s grounding on Friday because licencing authorities thought the investment company was a living person partying in Bermuda.
While the founder and namesake of Allan Gray does live in Bermuda, he holds no personal stakes in the airline. But the booboo nearly cost Comair its licence to fly, which would have seen it grounded – a huge disruption in the aviation market.
Comair operates domestic flights under the British Airways and Kulula brands.
Air Services Licencing Council officials thought Comair had contravened restrictions on foreign shareholdings in local airlines because it did not know Allan Gray is South Africa’s biggest and currently most-successful fund managing company, with billions under its custodianship.
A desperate Comair turned to the North Gauteng High Court to have the council’s decision reviewed and set aside. The matter has been dragging on since January 2014.
Advocate Mike van der Nest, for Comair, told the court competitor Safair had laid the intitial complaint against Comair for non-compliance with the 25% limit. Safair, however, withdrew its complaint, but the council continued to pursue it.
Comair continually engaged the council and demanded reasons for the council’s ire.
This became clear to Comair in the middle of last year, when the council eventually replied.
From these reasons, it was clear that the council thought “Mr Allan Gray” was an individual living in Bermuda and therefore a foreign shareholder, Van der Nest said.
Van der Nest explained the misunderstanding also showed the council had not even read all the information Comair submitted, since Comair did provide detail on Allan Gray’s different funds.
“There is no way anybody who read the document would have thought Allan Gray is a (natural) person,” Van der Nest said.
When Comair tried to address the obvious mistakes with the council, the council advised it to tell it to a judge, saying it was ready to defend its decision in court.
On Friday, Advocate Viwe Notshe for the council, skirted allegations his client had the wrong end of the stick on Allan Gray.
He argued instead that the review application was premature, since the council had not yet actually suspended Comair’s licence.
At this stage, the council had such a suspicion but had done nothing. So there was nothing to review.
Van der Nest said if Notshe’s argument was accepted, Comair would have to wait for the council’s wrong decision to result in some wrong action. “Do we have to wait for it to be compounded before it can be corrected?” he asked.
Judge Joseph Raulinga reserved judgement. The council is interdicted from suspending Comair’s air services licence until the matter has been finalised.