Kumuka probed over TCF acceditation

Kumuka probed over TCF acceditation
By admin

Adventure operator Kumuka should have been stripped of its Travel Compensation Fund licence more than 12 months before it ceased trading, it has emerged.

Liquidators of Independent Travel Adventures, which traded as Kumuka, revealed that an accounting discrepancy hid the true financial position of the company.

Investigations into the history and reasons for the failure are continuing, including whether the company traded while insolvent, with the liquidator Pitcher Partners questioning the company’s auditors who are understood to have denied any wrongdoing or negligence.

Part of the investigation has fallen on a $600,000 long term deposit transferred to UK-based Kenlin Ltd, which has also gone into liquidation.

Independent Travel Adventures was a representation firm of Kenlin which traded in the UK as Kumuka Worldwide. Although seperate legal entities, they shared a common shareholder and director in Ozkan Ozbuluter.

In a report into the collapse, Pitcher Partners said the $600,000 should have been disclosed as a ”related party transcation” and displayed in the accounts as “cash not available”.

“There was no such disclosure,” the report states. “The term deposit should have been excluded from the Annual Returns and Financial Ration Analysis lodged with the Travel Compensation Fund (TCF). The term deposit was included. Creditors will note that if the term deposit was excluded…the company would not have met the TFC Financial Criteria.”

Partner Anthony Elkerton later told Travel Today: “What I can say is that the company should not have has its accreditation from at least July 2011, and possibliy earlier and that’s what the investigations are all about. There is audited accounts and we are investigating those accounts.”

In addiiton to the $600,000, which had been pledged as security by Kenlin for its overdraft facility, the report stated that Kenlin is a debtor to Independent Travel Adventures to the tune of $580,000 which comprises a loan of $390,000 and almost $200,000 in unpaid representation fees.

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