BY: STEVE CREEDY From: The Australian May 29, 2012 11:55AM
QANTAS has withdrawn its four directors from the board of Air Pacific in response to the Fijian government's bid to take control of the airline.
In another sign of the deteriorating relationship between the major shareholders, Qantas International chief executive Simon Hickey, QantasLink boss Narendra Kumar, company legal counsel Brett Johnson and Charles Harvey will step down immediately.
Qantas, which has been trying to sell its stake in the Fijian carrier but has been unable to agree on a price, said the government decree was expressly designed to reduce the Australian carrier's role in the board.
It said that, under the Civil Aviation (Ownership and Control of National Airlines) Decree 2012, at least two-thirds of the board of directors of Air Pacific must be Fijian citizens, meaning only three directors can be foreign nationals.
Qantas said today: "Qantas has held a 46 per cent share in Air Pacific since 1998.
Throughout this time, the airline has been substantially owned and effectively controlled by Fijian nationals, as required by the Air Pacific Articles of Association.
"Qantas' only right under the Articles of Association has been to appoint four directors to the Air Pacific board (where a two-thirds majority must endorse major decisions). At no stage has Qantas had 'veto rights' over any aspect of Air Pacific’s management.
"Despite these parameters, the government has made clear its intentions to unilaterally take absolute control of Air Pacific under the new decree. In the circumstances, Qantas believes it is appropriate to remove its four directors."
Qantas said it retained its rights as a shareholder and would continue to consider options for the potential sale of its stake.And the regime has the nerve to now cry foul and backtrack on all the posturing by Aiyaz Sayed Khaiyum?
Ministry of Information
May 29|18:44 pm
The Fijian Government is disappointed by the actions and statements of Qantas, and it categorically denies that it has any intention of taking control of Air Pacific Ltd. The recent Civil Aviation Decree was designed to ensure that Fiji complies with the Chicago Convention and Bilateral Agreements that require national airlines that fly to other countries to be “owned and effectively controlled” by the citizens of that country.
This very point was made by Qantas on 12 March 2012 when they themselves argued to the Australian International Air Services Commission that Virgin Australia was not under the “effective control” of Australian citizens and hence ineligible to transfer capacity on the Indonesian route as Virgin had requested on 23 February 2012.
Fiji’s laws regarding the ownership and control of its national carrier are now the same or similar to those that exist in many other countries, such as the EU, United Kingdom, Canada, Australia, New Zealand, and the United States.
The Fijian Government has no interest or intention to nationalise any company in Fiji. Qantas is welcome to maintain the same rights as a normal minority shareholder, and dividends will be paid as and when declared.