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By NISHA RAMCHANDANI
The liquidation process for the now grounded Flying Club is underway but chief executive Nicklaus D'Cruz is in talks with an Indonesian businessman to take over its operations.
Mr D'Cruz says he is in discussions with a wealthy businessman who owns an aviation business in Indonesia, as well as a fleet of planes.
'We're talking to him about keeping two planes in Singapore and then taking over the memberships so at least the members still get what we tried to promise them,' Mr D'Cruz told BT yesterday, after a meeting with consultant BDO Raffles to kick-start the liquidation process.
So while his own outfit will be wound up, Mr D'Cruz is hoping that the Indonesian party will start operations for the Flying Club's stranded members.
The exclusive aviation club, which started over a year ago, became a victim of the financial crisis, chalking up losses of over $4 million even before it took off.
Founder Mr D'Cruz, who invested over $3 million, had leased 0.8 hectare of land at Johor's Senai Airport and hangar space at Seletar, leased four Cessna planes from Perth-based MRO specialist AirFlight and also appointed ground maintenance crew.
The planes have since returned to Australia and the operations at Seletar have been mothballed, leaving 51 members - who collectively paid close to $1 million - in limbo. It had originally planned to recruit up to 180 members, but recruitment dried up late last year as the financial crisis intensified.
'The last person who bought was in July or August,' said Mr D'Cruz. But new memberships had already slowed to a trickle by then. 'Then the economy completely tanked and we've had nothing since.'
The decision to cease operations was reportedly made in February.
Mr D'Cruz did not reveal whom he hopes to hand over the reins of the club to, but said the interested party was also currently looking at purchasing three aircraft - one 14-seater Cessna Caravan, and two other smaller aircraft.
When contacted, a member who had previously sent the company a legal letter highlighted that some members are likely to tread cautiously before getting involved with the Flying Club again. 'I think members would be sceptical. We'd want to make sure planes are here on the ground,' he said. There were also concerns about promises made that were never fully delivered, he added, pointing to its clubhouses.
For now, liquidation proceedings have already begun and could potentially unlock almost half-a-million dollars from paid-up deposits as well as other avenues. But this will go to creditors, who are owed that amount, rather than members. The entire winding-up process could take about a year.
Meanwhile, Mr D'Cruz is facing letters of demand from several members as well as a lawsuit for some $60,000 filed by his former director of sales, Harvey Campbell, for alleged unpaid wages, he said. These letters have since been handed over to the liquidators.
Some members were angered to learn of the collapse of the club from a BT report dated April 30, rather than being told personally.
'We had already spoken to some (members) but not to all,' Mr D'Cruz said.
Last week, a media report highlighted that some members had raised concerns with regard to how the funds were used, quoting one member as saying that there should have been greater transparency about the problems facing the club.
According to Mr D'Cruz, employment and overheads ate up over $1.2 million, while close to $500,000 was channelled each towards AirFlight and marketing initiatives. Other areas of expense included leasing of property, government licensing as well as additional miscellaneous costs.
Despite having paid some $20,000 for his membership, entrepreneur Charles Wong of local shoe retailer Charles & Keith remains sympathetic.
'No one is spared this downturn,' Mr Wong told BT. 'He (Mr D'Cruz) put in a lot of time and hard work. Unfortunately, it didn't turn out well. It's just bad timing.'
This article was first published in The Business Times.
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