Holiday chaos as Value World Travel collapses, $3 million worth of airline tickets disappear

A POPULAR travel agency has gone under, with mystery surrounding the fate of $3 million worth of customers’ money used to buy non-existent tickets.

THOUSANDS of members of Sydney’s Indian community have had their holiday plans thrown into chaos after a popular travel agency went under, with mystery surrounding the fate of an estimated $3 million of customers’ money paid for non-existent airline tickets.

Blacktown-based Value World Travel Pty Ltd was placed into administration last Thursday after changing hands a week earlier. Some customers reported only finding out their tickets had been cancelled after arriving at Sydney airport.

“Can’t believe all this s*** is happening for real,” Deepanshu Bhardwaj wrote on Facebook.

“We made our bookings in the month of August and paid Value World by bank transfer. Only when we were at the airport that we came to know about the cancellation. We had to travel for some medical reasons and now we can’t afford to buy [new] tickets.”

An estimated 2170 customers, the large majority of Indian background, had booked tickets as early as May this year to travel home for the Diwali and Christmas holiday period, which begins this week. The average ticket price was between $1200-$1400, putting potential losses upwards of $3 million.

Two of Value World Travel’s former directors, Neni Vijayant Tiwary, 42, and Gargi Tripathi, 40, were banned from managing companies by the corporate regulator in January this year over the collapse of two green slip insurance businesses, Value Greenslips Pty Ltd and ICRA Pty Ltd, both of which went into administration in 2012.

The Australian Securities and Investments Commission investigation into the collapse found Mr Tiwary and Ms Tripathi failed to comply with financial record-keeping obligations and “failed to exercise their duties as directors with care and diligence by not taking reasonable steps to monitor and control the companies’ financial affairs”. ASIC records show Mr Tiwary and Mr Tripathi ceased their directorships of VWT in late October.

The ticket wholesaler, CVFR Travel Group, maintains it purchased the tickets from the airlines on behalf of Value World Travel as it is required to when arranging flights, but never received payment.

“Our client’s position is that it is a victim as well,” a lawyer for CVFR told news.com.au

“CVFR is owed a substantial amount of money, as are a number of creditors. What happens is, you go into Value World Travel and buy your ticket, give them your money, they then book you into the booking system. The wholesaler still has to pay the airline whether he gets the money or not.”

Customers were told the tickets, the majority booked with Malaysia Airlines, had been cancelled by the CVFR in an attempt to recoup money the wholesaler did not receive, leaving them thousands of dollars out of pocket.

Dr Yadu Singh, a cardiologist based in Baulkham Hills, said he lost seven plane tickets worth around $8000. “The airline said the tickets are being cancelled by the wholesaler, we said we paid our money in May, how can you cancel six months later?” he told news.com.au

He questioned what kind of business relationship allowed more than $3 million worth of plane tickets to remain on a credit line for up to six months.

“It is not possible that the travel agent would not have paid the money for six months,” he said. “No company can work with that sort of arrangement.”

Dr Singh said members of the community were devastated, and questioned how this could happen in Australia. “Most of them have never been through this, they’re saying, how can this happen?” he said.

“Some are going to try and lodge complaints.”

Many travellers were forced to rebook at the last minute.

A spokesman for NSW Fair Trading said as the company had been placed into liquidation, Fair Trading was no longer in a position to mediate disputes between the parties.

“In these circumstances consumers should contact the liquidator to register as an unsecured creditor,” he said.

“Consumers who have paid by credit card are advised to contact their financial institution to make inquires about whether they are eligible to apply for a credit card chargeback. Consumers can also check their travel insurance policy, however it is understood by Fair Trading that these circumstances are unlikely to be covered.”

The liquidator is Jirsch Sutherland & Co.

News.com.au contacted the liquidator for comment but was told the company was being “inundated” with calls. A spokeswoman for Malaysia Airlines declined to comment as the airline was “not involved” with the issue. Mr Tiwary and Ms Tripathi could not be reached for comment.

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Originally published as Holiday chaos as Value World Travel collapses, $3 million worth of airline tickets disappear