The screws are tightening on Bestjet founder Rachel James and husband Michael

The liquidators of Bestjet hope to get some answers when they subject the couple behind the collapsed online travel booking group to a public examination in Federal Court in late July.

SCREWS TIGHTENING

The screws are tightening on disgraced aviation executive Michael James and his wife, Rachel, whose online travel booking group Bestjet collapsed in December.

Liquidators of the Brisbane-based company plan to subject the pair to a public examination in Federal Court in late July in the hopes of resolving a raft of unanswered questions about its operations, including the flow of money to entities in Singapore controlled by the couple.

Another 20 people tied to Bestjet, including family friend Robert McVicker, who took a half-stake in the firm and ran it for just six weeks before it crashed, also face a grilling. All parties must turn over documents on June 12.

Nigel Markey, one of the liquidators with ironically-named accounting firm Pilot Partners, told creditors last week that just over 6000 parties are owed anywhere from $26 million to $28 million.

Michael and Rachael James.

That figure has blown out from the $10.7 million estimate in January and it’s still unclear if creditors, including plenty of dudded airline ticket holders, will be able to claw any money back.

Markey also revealed that legal action had kicked off in Singapore to recover $3.2 million from an intact entity known as Bestjet Travel, which is still controlled by Ms James. She has lodged a defence.

Mr James, a former bankrupt who was banned from running companies for three years after his Air Australia airline went bust owing nearly $100 million in 2012, did not return a call seeking comment yesterday.

His wife, who launched Bestjet in Brisbane just two week after Air Australia’s crash, could not be contacted.

Markey said they had both ignored requests to turn over all company books and records, prompting referrals to ASIC.

McVicker told us that he was working cooperatively with Pilot Partners.

Public examinations are a costly exercise but they’ll be funded by $3.6 million in cash frozen in the company’s bank accounts. There could also be another $6.2 million in airline rebate payments available.

UNCOVERING FACTS

So what do Markey and his legal team hope to uncover during the court hearings?

The latest report to creditors, released in late April, gives us a pretty good idea.

The liquidators allege that Mr James, who acted as a “commercial manager’’ at Bestjet, may actually have served as a shadow director of the firm and say it could have been trading while insolvent.

Michael James was banned from running companies for three years after his Air Australia airline went bust owing nearly $100 million in 2012.

Interestingly, they claim he logged on to a Bestjet accounting system four times following their appointment “despite advising us that he did not have access to this account’’.

Major business accounts in this same system “were not reconciled for some time prior to our appointment,’’ the report says.

Not surprisingly, there are a raft of questionable financial transactions the liquidators want to scrutinise.

Among these are a $44,298 loan to Ms James, three transfers totalling $49,127 made on the date of their appointment to a related party of Mr McVicker, $222,438 owed to other related party creditors and $292,052 in payments made in the month before the company fell over. There were also payments to the Disney Vacation Club in Hawaii.

Rachel James launched Bestjet in Brisbane two weeks after Air Australia collapsed.

Perhaps most startling is the revelation that Bestjet splashed out $427,484 for a motor racing sponsorship between July 2017 and October last year, just two months before it failed.

The public examinations will also help unearth more details about Ms James’ company in Singapore, as well as another entity based in that city known as OTAlab, which is controlled by Mr James.

Bestjet customer Kate Ryder, who lost more than $3000 on flights to Europe, has vowed to show up every day in court.

Her “Bestjet Fiasco Action Group’’ on Facebook now has nearly 3500 members and she told City Beat yesterday that she wants to see company executives held to account and find out where money went. She also hopes to see reforms in the online travel industry.

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