Leong asks lawyers to pursue Viva Macau case

Lionel Leong pictured yesterday in Hengqin

The Secretary for Economy and Finance, Lionel Leong, said yesterday that the government was making a continued effort to optimize its existing subsidy and loan schemes available to local businesses. Speaking to reporters on Hengqin Island, Leong said the government had asked its lawyers to continue the case against Viva Macau’s guarantor in order to recover a loan made to the bankrupt airline. He added that following Viva Macau’s bankruptcy, the government hired an external team of lawyers to pursue the case – via civil litigation – against the Hong Kong-registered guarantor of Viva Macau. Leong said that at the time, the approach was considered to be more efficient for following up the case, rather than requesting a team of civil servants from the Industrial and Commercial Development Fund to do so.

Earlier this week, Legislative Assembly’s (AL) directly elected lawmakers, José Pereira Coutinho and Sulu Sou, jointly delivered a proposal during the plenary session for discussion and clarification over the loans granted by the government to Macau’s bankrupt low cost airliner Viva Macau.

The lawmakers proposed a discussion on the subsidies conceded by the government, totaling MOP212 million, to the company by the Industrial Development and Commercial Fund (FDIC) which were not able to be retrieved after the company filed for bankruptcy.

According to a statement from the office of the president of the Court of Final Appeal (TUI), as the Times reported on Monday, the courts informed that
all the procedures related to the bankruptcy process of Viva Macau concluded on June 6 and creditors will not be able to recover investments made in the bankrupted company.
The FDIC is the second largest creditor of the company (MOP212 million), right after the Eagle Airways Holdings Limited, to whom Viva Macau owes around MOP470 million.
According to the statement, the bankruptcy administrator was only be able to sell some of the seized assets (including automobiles, luggage containers, airplane meal trolleys and office supplies) to obtain MOP98,000, which when added to the MOP20,759.64 in the bank accounts at the time of bankruptcy, reached a total amount a little less than MOP119,000. This led to a judge to issue an order on January 23, noting that the sentence was final and that Viva Macau no longer had any other property or sums to pay the debts of creditors.

In their statement, the courts also noted that efforts to claim the payment of MOP212 million in five different installments of the government subsidy from the guarantor, Eagle Airways, was not possible due to the attachment order over Eagle Airways’ Hong Kong bank account. At the time (October 2011), there was no judicial co-operation agreement signed between Macau and the neighboring region of Hong Kong.

In the debate proposal now made by the two lawmakers, the government has been asked for an explanation as to why there was no action taken to seek compensation for the amount of the loan earlier, as well as the reasons why it continued to support the company financially, having given two of the five installments even after there were problems fulfilling the duties regarding the first three.

Coutinho recalls the letters to the president of the AL sent back in 2008, 2009, 2013 and 2014, when he had questioned the government via verbal and written enquiries on the case and had received no replies. He urges the government to come to the plenary to explain their “negligent responsibilities” on the loans and on the consequent damage to public safety.

The lawmakers also claim that the call for the debate is to ascertain what went wrong in the process in order to ensure that similar cases do not happen again, stating that hopefully such a proposal can gather the support of other lawmakers.