Bonza directors avoid prosecution despite insolvent trading allegations
The corporate regulator has revealed it will not prosecute the directors of Bonza following the collapse of the budget airline last year.
The Sunshine Coast-based carrier suspended all flights and entered voluntary administration in April 2024.
Liquidators Hall Chadwick alleged the company traded while insolvent.
On Friday a spokesperson for the Australian Securities and Investment Commission (ASIC) confirmed the investigation had finished.
Bonza’s planes were repossessed and flights were suspended before 323 employees lost their jobs. (ABC Sunshine Coast: Owen Jacques)
“ASIC has sent no further action letters to Australian and US directors of Bonza, confirming it does not intend to proceed to enforcement action at this stage,” they said.
“ASIC may recommence its investigation or commence enforcement action if circumstances change or it receives new evidence.“
The decision does not clear the directors of wrongdoing or indicate they did not break the law, rather that the regulator has declined to take action for reasons that could include the cost, time and availability of evidence.
Hall Chadwick and former Bonza chief executive Tim Jordan have been contacted for comment.
Tim Jordan had said the increased competition from the airline would lead to lower prices in the market. (Supplied: Bonza)
Cut-price model collapses
Bonza began flying in February 2023 but was plagued with problems and only had four aircraft by the time it collapsed 14 months later.
The airline was wholly reliant on funding from its controversial majority owner, 777 Partners.
Last year the ABC revealed the US Department of Justice was investigating whether the investment firm had violated money-laundering laws.
Bonza offered dirt-cheap fares between regional destinations but haemorrhaged money and never turned a profit.
Hall Chadwick’s report last year said the company had “significant” solvency issues from November 2023 and may have been insolvent from March 2024 until its collapse at the end of April.
Hundreds of staff and more than 70,000 customers with bookings were among the creditors.
Hall Chadwick’s report suggested Bonza was trading while insolvent. (Supplied: Bonza)
Liquidators facing questions
Insolvency expert Michael Sloan said he was not surprised ASIC declined to prosecute because it usually only acted in “egregious circumstances”.
‘The real story is what the liquidators are doing,” he said.
“Where you’ve got a major collapse, it’s the liquidators’ primary duty to pursue directors on behalf of the unsecured creditors, to hold those who have caused losses to account.
“Liquidators have very muscular powers under the Corporations Act to examine and investigate and prosecute … that’s what they’re there for.
“Have they got funds available? Have they sought funding?
“They might have got independent advice that prosecution would be difficult, costly and may result in no return to creditors.“
