Champions' double 'tragedy'

HARARE - Under-fire Champions Insurance (Champions), which has been thrust into the centre of the Air Zimbabwe (AirZim) whirlwind, was actually invited to “clean the rot and mess” created by airline managers and surrounding the flag carrier’s insurance portfolio, documents show.

This follows an early 2013 request and clearance for company managing director Nathan Chikono, the immediate past finance committee chairperson for AirZim, to use his company in managing and regularising premium payments to external insurers.

“This letter serves to confirm... Champions Insurance Company as Air Zimbabwe (Private) Limited’s domestic insurers... and authorises you to handle, together with our international insurers Marsh UK,” company secretary Grace Pfumbidzayi said in a March 21 dispatch to the short-term insurer.

Despite penning this key letter, the embattled AirZim secretary has alleged in court — where she faces fraud charges along many others — that Chikono and company were out to preserve their business interests.

The appointment followed an AirZim inquiry into the issue of contentious and unending insurance premium-payments around 2013, and where it was discovered that the cash-strapped airline’s current policy was paid up.

While Ozias Bvute’s board had sought to tackle the insurance puzzle as part of on-going efforts to manage cash-flows and cut an entrenched chain of brokers, including Navistar, a raft of March 2013 letters and correspondence by Marsh’s Graham Hersey to Chikono blew open the shenanigans at the troubled airline.

Even, though, the ex-Tristar MD had chosen to help the airline on a voluntary basis — to a point of foregoing his sitting allowances and company commissions —  Champions looks set to suffer a double-whammy in that its reputation is on the line and yet it had also provided a $5 million guarantee to AirZim.

So crucial was the guarantee that the Zimbabwe Revenue Authority had refused to allow the airline to land its two Embraer jets —  leased from South Africa’s Solenta Air — in Zimbabwe if the much-needed cash was not paid.

As it is, Chikono and colleagues stepped in since the airline had failed to raise the guarantee as most of its properties were mortgaged to one local bank, which is owed in excess of $4 million.

Cumulatively, AirZim owes creditors and suppliers about $232 million.

Crucially, Champions has had to intervene — on numerous occasions — to save or bail out the cash-strapped airline, as global insurers led by Marsh have routinely threatened to cancel its insurance policies.

According to information at hand, it takes up to $750 million to insure a Boeing 767 jet and yet AirZim’s planes were covered at nearly Euro  10 million each.

On the other hand, the Airbus A320-200s were insured for Euro 40 million, while the smaller Boeing 737-200s were covered at just under Euro 3 million, according to a recent market slip by Champions.

And according to an April 3, 2013 letter by Hersey to the local short-term insurer, AirZim was supposed to pay four equal instalments of Euro 398 000 beginning May 4 last year to January 4 this year.

On the other hand, the troubled airline was also supposed to remit $1,3 million.

Comments (3)

The insurance industry is now being run by amateurs and daylight robbers despite most of the operatives being holders of chains of degrees in insurance. One of the basic tenets of insurance is the principle of "utmost good faith" that is to say that insureds, insurers and brokers/agents must ALWAYS act HONESTLY with full disclosure in their dealings, but alas, because of the jambanja mentality and the lack of rule of law that has been driven into and entrenched itself in our pysche starting with people at the very top - our national political leaders, this principle has been thrown out of the window. These are the CHAMPIONS OF INSURANCE, including unethical business behaviour for you! There is rumour doing the rounds that the Champions MD is a relative of the former MoT Minister or that they are homeboys.

Dopori - 24 February 2014

"It takes 750 million to insure a 767 Jet"..is this a typo or the reporter actually believes this..Does this say this about the value of the 767? Please proof read things before making complete idiots of yourselves, please. Why destroy such a lively paper with this carelessness? The tone of the article seems to suggest that the reporter is allowing his personal sympathies to cloud the whole report..This is really uncalled for. Please stay professional, you owe it to your readers and yourselves to do this.

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