Tuesday, October 15, 2019 - Over 200 Kenyans are set to lose their jobs after Passenger and Cargo carrier, Air Afrik, announced that it is laying off 80% of its staff in Kenya and South Sudan as part of the company’s restructuring process.
The carrier has been forced to take the drastic measure after it lost a $20 million (Sh2 billion) plane leasing contract with the government of South Sudan.
The carrier is also embroiled in a court case pitting it against Stanbic Bank where it has accused the lender of breaching banking regulations by failing to act diligently before crediting funds, freezing its accounts and reversing the funds without a valid court order or a directive from the Central Bank of Kenya.
The bone of contention is a $7.2-million (Sh720 million) down payment said to have been made by the Government of South Sudan, which the bank is alleged to have credited to Air Afrik’s bank account held in the same bank only to reverse it a few days later.
The payment was the deposit for a plane-leasing contract that Air Afrik had signed with the Ministry of Defence and Veteran Affairs of South Sudan.
The lender defended the move saying their efforts to push the Bank of South Sudan to release the $7.2 million did not bear fruit as the central bank did not respond to their letters.
Air Afrik claims that the failure to get access to the funds weakened its capacity to honor the plane-leasing contract and as a result, the contract was terminated, causing it losses and damages amounting to $14.4 million.
The carrier seeks compensation amounting to $14.4 million for the loss suffered and the costs of the suit.
“We understand this is a challenging time for our team, but these steps were necessitated following Stanbic Bank’s negligent errors, oversight and unlawful actions, the company said in a statement.
“The bank has caused huge losses and job cuts to the company which it seeks compensation amounting to$ 14.4 million (Sh1.44 billion),”