Travel Woes: Questions over Thomas Cook auditors

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The Independent Online

Fears are emerging of a possible conflict of interest over Ernst & Young's role in the financial restructuring of FTSE 250 tour operator Thomas Cook.

A syndicate of 17 lenders led by HSBC and Barclays Capital, appointed the accountant last week to examine options for a possible financial restructuring of the firm, which has made three profit warnings in 18 months.

However, Ernst & Young is also the internal auditor of Thomas Cook, so has established many of the checks-and-balances that would have been used to protect the firm's finances. An accountancy source said this was, at best, "a bit unusual" and raised questions over whether Ernst & Young could be objective.

Thomas Cook is looking for £100m from lenders, though debt could reach £1.5bn by the end of next month. PricewaterhouseCoopers is acting for the firm's management to find a solution to its woes.

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