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.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat