News

TCF presses ahead with CIC, Kumuka action

The Travel Compensation Fund (TCF) is pressing ahead with attempts to claw back money from Classic International Cruises (CIC) and Kumuka which both collapsed last year and generated $5.5m worth of claims.

The firms went under within five months of each other, with the TCF repaying $3.5 million to Classic International customers and $2m to Kumuka clients.

TCF chief executive Glen Wells said it is continuing to pursue money relating to both collapses with a CIC hearing set down for the NSW Supreme Court next Monday and Kumuka scheduled for the end of November.

In the CIC case, the TCF is trying to gain access to funds held in a bank account while the auditors are the target of legal action in the Kumuka collapse.

“We are positive of successful outcomes,” Wells told Travel Today.

Adventure operator Independent Travel Adventures, which traded as Kumuka, was first to go, in July. Liquidators Pitcher Partners said in a report soon after the collapse that an accounting discrepancy hid the true financial position of the company.

Attention centered on a $600,000 long term deposit transferred to UK-based Kenlin Ltd, which traded as Kumuka Worldwide and also went under. Independent Travel Adventures was a representation firm of Kenlin and although separate legal entities, they shared a common shareholder in Ozkan Ozbuluter.

In its report, Pitcher Partners said the term “deposit” should have been excluded from the accounts and the $600,000 disclosed as a “related party transaction” and displayed as “cash not available”.

“Creditors will note that if the term deposit was excluded….the company would not have met the TCF financial criteria,” a report into the collapse stated.

Partner Anthony Elkerton said at the time that the company should not have had its TCF accreditation “from at least July 2011”, more than 12 months before it collapsed.

The auditors of Kumuka have filed a defense with a preliminary hearing due to be heard on November 29.

The CIC case is understood to be at a more advanced stage with the TCF chasing around $2m-$3m held by administrators.

The TCF is arguing that it should be handed the money having shelled out $3.5m to consumers when the company ceased trading at the end of last year.

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