However, the company’s lawyer says it now plans to take the case to superior court.
Sinorama loses attempt to get travel agency licence back
Troubled travel company Vacances Sinorama and its owner, Hong “Simon” Qian, have lost an attempt to have the company’s travel agency permit renewed.
The company now plans to challenge that decision in Superior Court.
Vacances Sinorama lost its travel agency permit on Aug. 7, after Quebec’s Office de la protection du consommateur found the company was not in a position to comply with the requirements of a provincial law governing how travel agencies manage funds prepaid by customers.
The company appealed that decision, as well as a July 24 decision to put the it under trusteeship to the Tribunal administratif du Québec.
On Wednesday, administrative judge Stéphan F. Dulude, rejected the appeal, ruling that the harm to the company caused by the OPC’s decision did not outweigh the public interest.
Travel agencies in Quebec are required to hold funds prepaid by clients in trust — only using the funds to pay suppliers, like airlines.
In May, according to Dulude’s decision, the OPC notified Sinorama of deficiencies in the way it was handling that money.
On June 13, the OPC accepted a voluntary agreement from the company intended to fix those deficiencies and address the OPC’s concerns.
However, by July 5, according to the OPC, the company had already violated the agreement. Further violations were found later in the month.
In a quarterly report filed with regulators in the United States, Sinorama’s parent company reported that as of March 31, 2018, there was a US$17 million difference between funds prepaid by customers and prepayments by the company to tour vendors. However, at the time, Sinorama only had US$7.8 million in cash on hand, leaving a US$9.7 million hole.
In its annual report for 2017, the company reported that deficit – which was smaller at the time – would have to be funded out of future sales.
Lawyers for the company argued that the OPC had acted in bad faith, but the TAQ said the evidence submitted gave no indication of that.
Two other subsidiaries of Sinorama’s parent company have also shut down.
Ontario-based Sinorama Holidays voluntarily gave up its licence, while British Colombia-based Sinorama Travel had its licence suspended by consumer protection authorities in that province.
On Friday evening, a lawyer for the company, Brian Mitchell, said it will file a request for judicial review. It’s asking the Superior Court to cancel the TAQ decision and suspend the OPC decisions until a hearing is held on their merits.