Air Afrik will
cut roughly 80 per cent of its salaried staff in both Kenya and South Sudan by
November as part of the company’s restructuring process. The move will
eliminate 200 white-collar jobs.
The carrier hit major turbulence
following the loss of a $20 million plane-leasing
contract with the government of South Sudan.
Since the loss of the contract and the
court case against Stanbic Bank the company has been reviewing its process; fitting people into the right jobs and in the process, some roles have
become redundant.
“We understand this is a challenging time for our team, but these steps
were necessitated following Stanbic Bank’s negligent errors, oversight and unlawful actions,” the
company said in a statement
The court case stems from a banking
transaction gone awry. According to an official letter to the Central Bank of
Kenya, the South African-owned bank admits to having regrettably made an error.
Letters obtained from the Central Bank
of Kenya and the Bank of South Sudan to Stanbic Bank questions why Air Afrik
should suffer on account of a mistake admitted by the bank. The bank allegedly
withheld crucial information from the company as its customer, with a view to
covering its negligent errors, oversights and unlawful actions. Stanbic Bank
also supposedly failed to own up and take responsibility for its own errors and
oversights and compensate the plaintiff adequately for the damages and
inconveniences suffered.
“This unfortunate situation was created
by a severe lack in liquidity at the Company, which resulted from Stanbic Bank
failing to act diligently before freezing our funds without a valid court order,” the statement read.
Documents lodged at the Milimani
Commercial Courts reveal that Stanbic bank allegedly credited $7.2m down
payment to Air Afrik’s bank account held in the same bank only to reverse
it a few days later.
Air Afrik, refutes the reversal claims.
The company alleges that the bank deliberately forged the reversal using a fake
account dubbed Air Africa instead of Air Afrik in a bid to deceive them. The
company claims that the bank unduly benefited from the funds as they were not
reversed to Bank of South Sudan (BSS) despite Stanbic Bank freezing its
accounts in February 2016.
Documents from Bank of South Sudan suggest
that as of 15th August 2016, that is, six months later, the funds were still
not reflecting in their account disowning claims by Stanbic Bank that the funds
were reversed. According to the plaintiff, the funds were reversed 14 months’ post
freezing Air Afrik’s account.
The bank has caused huge losses and job
cuts to the company which it seeks compensation amounting to $14.4 million. The
revelations from the court proceeding raise fresh questions about the bank’s risk,
control processes and compliance with the Central Bank regulations.
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