COMAIR LIMITED - Safair Operations (Pty) Ltd (Flysafair) complaint against Comair in respect of its foreign shareholding

Safair Operations (Pty) Ltd (“Flysafair”) complaint against Comair in respect of its foreign shareholding

Comair Limited 
(Incorporated in the Republic of South Africa) 
(Registration Number: 1967/006783/06) 
ISIN : ZAE 000029823 
Share Code:  COM 
(“Comair” or “the Company” or “the Group”) 
 
  Safair Operations (Pty) Ltd (“Flysafair”) complaint against Comair in respect of its foreign 
  shareholding                                                      
   
  Background 
   
  Shareholders are referred to the following extract from page 31 of Comair’s Integrated Annual Report 
  for the year ended 30 June 2015, distributed to shareholders on or about 30 September 2015: 
   
        “Flysafair lodged a complaint with the Air Services Licensing Council (“ASLC”) against the Group’s 
        domestic air service license during the previous reporting period.  The complaint consists of the 
        allegation that the Group breached the Air Services Licensing Act by failing to apply for a license 
        amendment after undertaking a share repurchase programme and secondly that when a “look 
        through” construction is applied to the Group’s current foreign shareholding component, the 
        amount of this shareholding slightly exceeds the restrictions specified in the said Act.  In 
        September 2014, the Group and Safair appeared before the ASLC to make their respective 
        submissions on the complaint.  The ASLC deferred making a final decision on the complaint and 
        requested further information on the Group’s shareholding.  Detailed submissions were provided 
        by the Group to the ASLC.  At the end of November 2014, without having reached a decision on 
        the Safair complaint, the terms of appointment of the members of the ASLC expired.  New 
        members of the ASLC were only appointed by the Minister of Transport in March 2015, and in July 
        2015 the new members of the ASLC issued the Group with a notice requesting it to provide within 
        a period of 120 days some further shareholding information.  The Group is currently engaging 
        with the new members of the ASLC to satisfy and resolve the matter in an amicable way.” 
         
  Update 
   
  After July 2015, Comair provided further shareholding information to the ASLC and thereafter FlySafair 
  advised the ASLC via a letter that it would no longer persist with its complaint. 
   
  The ASLC nevertheless agreed to an extended period within which the Company should address the 
  alleged non-compliance with the Act. The Company made further submissions to the ASLC as to why it 
  is complaint.  The Company made submissions to the ASLC on the advice and with the assistance of its 
  external attorneys and senior counsel (“legal advisors”). Based on the advice of its external legal 
  advisors, the Company is confident that it is compliant with the foreign shareholding requirements of 
  the Act. The ASLC has advised the Company that it does not comply with the provisions of the Act and 
  that failure to comply with the Act will lead to a suspension of the Company’s domestic license.  The 
  ASLC has granted an extension until 11 May 2016 to comply. The Company’s view and that of its 
  external legal advisors is that the ASLC has not commenced suspension proceedings in accordance 
  with the Act. The Company has requested the ASLC to agree that it has not commenced suspension 
  proceedings in accordance with the Act, and has requested the ASLC to agree not to take any further 
  action against the Company pending the outcome of a review of the ASLC’s decisions. The ASLC has 
  failed to agree to the Company’s request. The Company has taken the precaution of launching an 
  urgent application to interdict the ASLC from suspending the Company's domestic license, pending the 
  outcome of a review by a court of law.  
 
  The Company stresses that the disagreement with the ASLC does not relate to the safety of the 
  Company’s operations. The disagreement with the ASLC relates exclusively to a shareholder regulatory 
  issue. 
 
  Shareholders will be kept advised of any further developments. 
 
Bonaero Park 
10 May 2016 
 
Sponsor: 
RAND MERCHANT BANK (A division of First Rand Bank Limited) 
 

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