BusinessLive reports that the South Gauteng High Court on Tuesday approved low-cost airline Mango, which is a subsidiary of SA Airways, going into voluntary business rescue.

The judge dismissed an application by three unions to have Mango placed in business rescue and instead accepted an application by Mango itself to be allowed to do so voluntarily. Responding to the judgment, the Mango Pilots’ Association (MPA) and the SA Cabin Crew Association (Sacca) said that the high court’s dismissal of their case in the airline’s favour opened up the business rescue system to abuse by companies seeking to block liquidation applications, or even stop other rival business rescue applications. The two unions and the National Union of Metalworkers of SA (Numsa) brought an urgent application last week to have the carrier placed in business rescue. MPA chairperson Jordan Butler commented that the ruling had the potential to set an “important legal precedent in terms of the Companies Act and the way business rescue is conducted in the future”. He explained: “Mango basically passed their business rescue resolution on April 16, and has sat on it for three-and-a-half months, and so it (the ruling) could open up a can of worms for the business rescue process in SA in the future. This could mean companies could just keep a resolution for months on end, just in case someone files a liquidation application.” He added that in principle the organisation was “happy Mango is in business rescue”, but that they “just wanted to do it together”, with the airline. Sacca president Zazi Nsibanyoni-Mugambi said the ruling meant companies “can take a business resolution whenever they want, put it in their drawer and use it whenever it suits them. It creates an opportunity for fraud for businesses.”

• Read the full original of the report in the above regard by Nick Wilson at BusinessLive
• Read too, Mango placed in voluntary business rescue, at Fin24

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