Doomed Bestjet: Inside the operators’ 20 year friendship

Doomed Bestjet: Inside the operators’ 20 year friendship

The disgraced husband of Bestjet’s founder and the Queensland businessman who acquired the doomed online travel company have a more than 20-year history dating back to failed airline Ansett.

Michael James’ wife Rachel James founded Bestjet in 2012, just weeks after his budget airline Air Australia went under with debts of up to $100 million.

Mrs James offloaded Bestjet to Robert McVicker Jr of McVicker International in November last year.

Michael James

The James family took a trip to Tasmania, insiders say, as the administrator released its report into busted Bestjet. (Supplied)

But just six weeks later, Bestjet went into administration.

There are more than 4000 creditors seeking over $10 million in unpaid debts.

Thousands of customers were left out of pocket after their airfares were cancelled.

Some customers were even secretly charged a second time after Bestjet went under.

Mrs James and Mr McVicker Jr have blamed each other for the multi-million-dollar collapse.

However, an explosive report by administrator Pilot Partners reveals the acquisition – and ultimate fall – of Bestjet was not clear cut.

Robert McVicker Jr pictured at the Ansett ball in Brisbane in the late 1990s, according to insiders. (Supplied)

Robert McVicker Jr pictured at the Ansett ball in Brisbane in the late 1990s, according to insiders. (Supplied)

Insiders have told 9Finance Mr James and Mr McVicker Jr have a long history.

According to multiple sources, the men first got to know each other while working at now-defunct airline Ansett.

Ansett, one of Australia’s biggest airlines, folded in 2001, leaving 16,000 people unemployed.

Mr James and Mr McVicker Jr worked as part-time customer service officers (CSO) at Ansett in the 1990s, checking in passengers at Brisbane Airport, insiders said.

“We had a very large social group and would often go out for lunches after work. We were all around the same age, mostly unmarried, and go to various waterholes for a drink,” one source told 9Finance.

“Every year we would have the Ansett ball and have a very good time. It was a very tight group because we were shift workers. Ansett was always known for being a very tight family.”

Michael James pictured at the Ansett ball in Brisbane in the late 1990s, according to insiders. (Supplied)

Michael James pictured at the Ansett ball in Brisbane in the late 1990s, according to insiders. (Supplied)

But, sources said, Mr James and Mr McVicker Jr formed a particularly close bond.

The pair played volleyball together after work and were even described as “best buddies”.

“They drank together, they had BBQs together. They were very close,” an insider told 9Finance.

So close, in fact, that they were groomsmen in each other’s weddings.

Mr McVicker Jr’s wedding to Tracy around 16 or 17 years ago was described as a stand-up cocktail affair at a seafood restaurant with water views north east of Brisbane.

Mr McVicker Jr’s millionaire father, Robert McVicker Sr, was also in attendance.

New Zealand-born Mr McVicker Sr formerly ran Morris Corporation, a Queensland-based catering company which won multi-million-dollar contracts to service locations such as war-torn Iraq.

Insiders say this picture of Michael and Rachel James was taken at their Brisbane wedding. (Supplied)A few years later, Mr McVicker Jr returned the favour, serving as a groom at Mr James’ “extravagant” wedding to single mum Rachel at a Brisbane hotel.

“It was ridiculous. It was pretty much like them (the Jameses’) – over the top extravagant,” an insider said. “They had lobster. There were at least 100 people.”

But multiple sources said the pair weren’t in touch for a “number of years” after that, for reasons that are unclear.

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Email reporter Rosemarie Lentini at rlentini@nine.com.au

In that time, Mr James bought into Strategic Airlines – then trading under a different name – in 2002.

In November 2011, he relaunched the airline as Air Australia, a low-cost carrier travelling to locations such as Phuket, Bali and Honolulu.

Just months later, in February 2012, Air Australia collapsed.

A fuel supplier refused to refuel an aircraft in Phuket due to outstanding payments.

Very little money was recovered from asset sales, leaving creditors $97 million out of pocket.

Air Australia, formerly known as Strategic Airlines, was launched in November 2011. (AAP/Strategic Airlines)

Air Australia, formerly known as Strategic Airlines, was launched in November 2011. (AAP/Strategic Airlines)

ASIC subsequently banned Mr James from running companies for three years.

Three weeks after Air Australia’s collapse, Mrs James founded Bestjet and was listed as the director.

Fast forward to November 2018.

ASIC records show Mrs James offloaded Bestjet, and associated companies Wynyard Travel and Brooklyn Travel, to McVicker International in a 100 per cent share transfer.

The director was Mr McVicker Jr.

McVicker International was registered with ASIC just a month before it acquired Bestjet.

On December 18 last year, Bestjet and its subsidiaries went into administration.

In its report to creditors, released this week, administrator Pilot Partners revealed that McVicker International had in fact held 50 per cent of shares in trust for Mrs James.

The report also showed a “Put and Call Option” agreement would enable Mrs James to control 90 per cent of the company by 2020.

The administrator also revealed a complex network of overseas entities connected to Bestjet, one of which was owned by a company based in the British Virgin Islands.

Rachel and Michael James with the Dalai Lama. (Supplied)

Rachel and Michael James with the Dalai Lama. (Supplied)

All requests for comment from Mr and Mrs James and Mr McVicker Jr to date have been refused.

But earlier this month, Mrs James and Mr McVicker made public statements in which they blamed each other for the collapse.

Mr McVicker Jr told a creditors meeting in Brisbane on January 2 he was forced to put Bestjet into administration after a promised $3.2 million payment from Bestjet Singapore never materialised.

He said his “reputation has been irretrievably damaged because of my involvement of the Bestjet Group” and that he placed the business into administration because it was “the only way a thorough investigation could occur”.

Mrs James in her statement to media, however, said Bestjet was a multi-million-dollar business when it was taken over by McVicker International.

“We simply cannot believe the devastation caused by the actions and inactions taken by Robert McVicker, with each day of inefficient management costing the business an average of $2.5 million and resulting in the loss of an Australian business,” Mrs James said in her statement.

Administrator Pilot Partners has recommended that creditors liquidate the company when they meet to decide its fate on January 31.

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Email reporter Rosemarie Lentini at rlentini@nine.com.au

 

Source = Rosemarie Lentini 9 News
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