Tempo Directors blame AFTA

THE Directors of the collapsed Tempo Holidays Pty Limited have laid the blame for the company’s demise squarely on the “governing bodies in Australia” including IATA, AFTA and ATAS.

During yesterday’s creditors’ meeting in Melbourne (see p1), administrator Laurence Fitzgerald read a statement from the Tempo Board of Directors - purportedly including Cox & Kings CEO Peter Kerkar and his brother-in-law Patrick Tully (see p2) - giving their explanation for Tempo’s collapse.

Fitzgerald laid out the timeline, including the 26 Jun default by Cox & Kings India on about $31 million of debt payments, plus more defaults on 15 Jul.

On 03 Jul AFTA issued a “show cause” notice to the company and quietly suspended its ATAS participation while Tempo responded to requests for further information on the implications of the Indian debt issues.

On 20 Aug Tempo Holidays filed with AFTA a request for the suspension to be lifted, but two days later AFTA formally terminated the company’s ATAS accreditation ( TD 22 Aug), on the basis of Tempo not being able to satisfy the requirements to prove that it was trading solvently.

According to the statement read by Fitzgerald, the Directors put Tempo into administration “based on the fact that the governing bodies in Australia - IATA, ATAS and AFTA - had withdrawn the company’s licence and accreditation and rejected the appeal for extension.

“While merchant bankers have been employed to sell the company in its entirety, including the Australian entities, these discussions were continuing at a pace taking too long to guarantee that any sales proceeds would actually arrive in time to enable the company to continue to trade,” they claimed.