Bosses took '£1m a week' from Christmas savers
Victims of the collapse of Christmas hamper firm Farepak had "no inkling" that "about £1m a week" of their money was being dipped into, as directors of its parent company sought to prop up other loss-making units of the group, according to allegations made in the High Court yesterday.
In a case relating to the collapse of Farepak (FFG) – and its owner European Home Retail (EHR) – Vince Cable's Department for Business, Innovation and Skills is seeking to disqualify former bosses of the group from being company directors for up to 15 years.
The directors include Sir Clive Thompson, the former chief executive of Rentokil and chairman of EHR, who was known as Mr 20 per cent in the City for the growth he oversaw at the royal ratcatcher; Neil Gillis, once head of Blacks Leisure and an EHR non-executive; and William Rollason, EHR's chief executive and former banker. All seven were seated on the back row of the court yesterday.
Farepak was set up to help low-income families save for Christmas by taking monthly payments and turning them into hampers or vouchers for use during the festive period. When it went bust in October 2006 tens of thousands of customers lost an average of £400.
Prosecutor Malcolm Davis-White QC, said: "The collapse did not come out of the blue. About a million pounds a week was coming in from savers who had no inkling that there was any serious risk that they would not receive their Christmas vouchers or hampers."
"In effect, FFG lent money to the EHR Group," said Mr Davis-White, adding "The money was regularly 'swept' from FFG's bank to EHR's bank account."
Much of EHR's debt related to the group's acquisition of Display Marketing Group in 2000, in a deal funded by a £45m Bank of Scotland loan. The deal was not a success and the company was disposed of at a considerable loss in 2003. The group also acquired the Kleeneze door-to-door homeware business in 1995, the Iwoot online sales business in 2004 and set up the eeZee TV satellite shopping channel joint venture in October 2004.
Seven of nine former bosses are contesting the disqualification application. The other two – Stephen Hicks and Joanne Ponting – have already agreed not to act as company directors.
Farepak clients received about 17.5p in the pound from a government-backed fund set up after it collapsed. Last year, they heard they would receive a further 15p in the pound.
- 2 The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Baldness could soon be treated using stem cells, scientists hope
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
Ball pool for adults opens in London
Amal Clooney gives excellent response to fashion question at European Court of Human Rights
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...