Swaziland King Mswati III’s official plane, held in southwestern Ontario for more than four months over an alleged $3.5-million debt, has been released after the kingdom handed the cash over to a trust account.
Shanmuga Rethenam, a Singaporean businessman who says Mswati owes him money, confirmed to the Toronto Star the plane was released on Wednesday from its hangar in Huron Park, Ont., following an order from a Toronto court.
But Rethenam, who sold Mswati the plane and says the king owes him for repair fees, won’t be getting paid — not yet, at least.
The money, deposited into a trust account, will go to the businessman only if and when the court establishes that Mswati does, in fact, owe him money. That is a lengthy legal process already running its course that the plane’s release has not disrupted.
Essentially swapping the impounded plane for money, Mswati has received a $11.45-million (U.S.) asset that is worth far more than the amount he is said to owe.
The king’s private secretary and royal estate manager, Sihle Dlamini, who has been in Toronto to deal with the current case, said in an affidavit that Mswati does not owe Rethenam money. He did not respond to requests for comment.
The Swazi government press office did not respond to requests for comment. Calls to Swaziland’s embassy in Washington, which handles the kingdom’s affairs in Canada, went unanswered.
The lawyer for Mswati’s side, Kenneth Prehogan, declined to comment, saying the matter is before the courts.
Rethenam was not immediately available for comment beyond the confirmation, though his lawyer, Sean Zeitz, who told the Star it is better to hold the money than the plane.
If Rethenam wins, he has to sell the plane to recover the money — an extra step, Zeitz said.
“In this case … Mr. Shan (Rethenam) succeeds at the end of the day. He doesn’t have to sell anything; he just takes the money.”
With the money in a trust account, Rethenam is also spared from forking over $10,000 per month to house the plane at the repair and modification firm New United Goderich Inc., where it was held.
The plane, a Boeing McDonnell Douglas DC-9, was seized in mid-January when it was having its entertainment system upgraded.
It is unclear when the plane will actually leave its current hangar, as the seizure had disrupted work on the plane. Court documents filed earlier this year indicated at least a week’s worth of work remained.
Goderich Inc. president Blaine Field declined to comment on the case, calling it a “privacy matter.”
The plane’s release has been in the works since March 27, when a court ordered its release due to technicalities. The plane was, however, still impounded, pending Rethenam’s appeal on June 11.
On April 9, still awaiting the appeal, all parties agreed to release the plane if an American or Canadian bank could guarantee payment to Rethenam if he eventually wins. Rethenam said in late April that could happen “within the next 48 to 72 hours,” though it was repeatedly delayed.
To obtain that guarantee, a letter of credit, the plane’s legal owner — a shell company called Inchatsavane Co. (Pty.) Ltd. that is owned by Mswati — would have to pledge money or assets to the bank.
The king’s firm was repeatedly unable to do so, Zeitz said. “Every time we negotiated and agreed, they didn’t deliver. Eventually, they acknowledged they couldn’t get a letter of credit. The language they used was they were ‘experiencing difficulty.’”
Zeitz said the parties renegotiated the terms late last week so that Inchatsavane can “post cash.” The $3.5 million was then deposited into a trust account held by the firm’s lawyers.
If Rethenam’s appeal fails on June 11, Mswati’s side will get the money back, but if the businessman succeeds, he still would not see the $3.5 million.
The appeal is over whether Rethenam can legally hold the plane. Court proceedings on the alleged debt itself will start only if court establishes that the businessman could have legally held the plane.
A spokesman from Canada’s Department of Foreign Affairs says it is aware of the case, though the department is “not involved at any stage.”