Tycoons in bitter clash over Sh4.1bn planes deal

The vicious boardroom wars that have threatened to stall operations of charter airline Bluebird Aviation have now entangled two rival firms in a fresh dispute over three planes valued at $40 million (Sh4.1 billion).

Bluebird co-founder Yusuf Abdi Adan has filed two fresh suits seeking to block the transfer of an airplane (model Dash 8-106 331) that is valued at $10 million (Sh1 billion) and two jets (Dash 8-402) worth $30 million (Sh3 billion), arguing that the sale and leasing deals with Safarilink Aviation and 748 Air Services are part of a scheme by his co-directors to bleed the firm dry at his expense.

The businessman claims in the fresh suit that the lease agreement with Safarilink is to end up in sale of the valuable aircraft, and that his Bluebird co-directors are earning proceeds of the deals with the two rival airlines.

He adds that the deal with Safarilink makes $100,000 (Sh10 million) monthly while the 748 Air Services one brings in $240,000 (Sh24 million) -- which is paid to the accounts of Hussein Ahmed Farah and Mohammed Abdikadir Adan respectively.

Mr Abdi holds that none of the deals was approved by the full Bluebird board of directors meeting.

But 748 Air Services in its response says that it is only leasing one airplane from Bluebird and that the deal is clean.

The airline adds that its plan to lease a second jet from Bluebird failed after losing a bid it placed for supply of charter services to the United Nations.

Mr Abdi last year sued his co-directors, Mr Adan and Mr Farah, seeking $1.5 billion (Sh150 billion) he claims they denied him over the 25 years that Bluebird has been in existence, through cooking books and excluding him from intimate company affairs.

Global assets

He claims the partners have used Bluebird funds to acquire shares in Safarilink, 748 Air Services and several other assets globally.

His co-directors argue in their responses that the fresh suits are an attempt by Mr Abdi to bog them down in the legal battle as there is already another suit the 75-year-old businessman filed last year as well as a separate petition to wind up Bluebird.

“Bluebird Aviation was the duly registered owner of an aircraft Dash 8-106 model 331 valued at approximately Sh1 billion.

Via an aircraft lease agreement between Bluebird and Safarilink the parties agreed to lease it for 36 months. The agreement was signed by Mr Farah.

The transaction was made without authority of Bluebird directors in breach of Mr Farah’s fiduciary duty as director,” Mr Abdi says.

“In September 2012 Mr Adan in collusion with Mr Farah and Hussein Unshur Mohammed transferred ownership of plane registration 5YVVN to 748 Air Services Barbados, a company associated with Mr Adan and 748 Air Services Kenya.

Mr Adan has abused his powers as Bluebird director by going into transactions in which he has obtained personal benefits and secret profits,” he adds in the second suit.

Ahmed Jibril, 748 Air Services Kenya director, holds that neither his firm nor its Barbados-based sister company has any interest in the running of Bluebird’s affairs and that they should be struck off the suit.

He adds that 748 Air Services Kenya’s leasing deal with Bluebird is clean and known to the Kenya Civil Aviation Authority (KCAA).

“If Mr Abdi contends that Bluebird did not receive the payments or that Mr Adan did not have authority to enter into the agreements, I verily believe that his recourse lies with his co-directors,” Mr Jibril says.

New suits

Mr Unshur Mohammed has filed an application seeking to dismiss the two new suits Mr Abdi has filed, arguing that he has the liberty to amend the initial case filed against Bluebird directors last year demanding Sh150 billion.

Mr Abdi has claimed in court that his partners have been using former National Bank of Kenya #ticker:NBK managing director Mohammed Hassan to fraudulently channel massive funds out of the company as part of a money laundering scheme and to sideline him from his rightful share of the company’s profits.

Bluebird operates a fleet of 21 airplanes, making it one of Kenya’s largest chartered flight companies.

Documents filed at the Milimani High Court claim that Mr Farah, Mr Unshur Mohammed and Mr Adan have made net earnings of $3 billion (about Sh300 billion) from Bluebird but have excluded their co-founder from the profit share.