Thomas Cook Directors Could Face Inquiry as Rescue Effort Continues
United Kingdom regulators and Members of Parliaments (MPs) were considering investigations into Thomas Cook’s auditors and directors as the fallout from the travel firm’s collapse continued. This after thousands of staff and suppliers facing uncertain futures and more than 100,000 holidaymakers were still due to be brought home on government rescue flights.
Financial Reporting Council
Britain’s accountancy regulator, the Financial Reporting Council (FRC), said it was considering the case for investigation and enforcement action “as a matter of urgency”. While MPs on the business select committee said there were “serious questions to answer” about how the firm was run.
The UK government has already announced a fasttrack inquiry into the collapse by the Insolvency Service, which is charged with closing down the 178-yearold holiday business.
Potential concerns for the FRC include the extent of “exceptional items” on the company’s balance sheet, which could have swayed investors and affected annual results – as well as the profit-related bonuses paid to directors.
Thomas Cook was audited by two of the UK’s biggest accountancy firms, with EY succeeding PwC from 2017. The tour operator had a series of finance chiefs over the past two years.
The pay of the last three chief executives of Thomas Cook has come under increased scrutiny. Labour’s John McDonnell has urged the former bosses to repay their bonuses while the Confederation of British Industry said “questions are now rightly being asked” about the £35m (FJ$85m) paid out over the past 12 years to Manny FontenlaNovoa, Harriet Green and Peter Fankhauser.
The business secretary, Andrea Leadsom, defended the government’s refusal to help bail out the company, insisting that it would have been “a waste of taxpayers’ money”.