Two senior executives at Excel Airways, the UK charter operator caught up in an investigation into accounting irregularities at the airline caterer Alpha Airports, have resigned with immediate effect.
Excel's parent company, the Icelandic-based Avion Group, said the airline's chief operating officer Steven Tomlinson and its chief financial officer Paul Roberts quit on Tuesday.
The resignation of the two men followed an announcement on Monday that Avion intended to strengthen the management of Excel and establish an independent audit board. A fortnight ago, Avion said it was taking a $10m (£5.5m) provision in its latest half-year results in connection with the Alpha affair.
The investigation into catering contracts between Alpha and Excel has already led to the resignation of Alpha's chairman, chief executive and finance director. The investigation, carried out by a special board committee aided by the law firm Ashurst, concluded that its behaviour had fallen below that expected of a public company.
The investigation centred around a £7.5m catering contract which Alpha and Excel entered into last summer. The way the contract was accounted for enabled Excel to manipulate its financial results before the flotation of Avion on the Icelandic stock market this January.
Alpha agreed an up-front discount with Excel which was paid in the form of a credit note. Instead of booking this over the five-year life of the contact, Excel accounted for it immediately, flattering its reported profits. The accountancy firm KPMG is now conducting a separate investigation into Excel and Avion's role in the affair.
A spokeswoman for Excel denied that the resignations of Mr Tomlinson and Mr Roberts were connected with the Alpha investigation, saying that both men had left the company of their own accord for "personal reasons".Reuse content