DELUDED!
MPs blast Thomas Cook’s handing out of millions for ‘failure’ – as bosses say 20m customers were happy
THoMAS Cook bosses were branded ‘deluded’ yesterday as furious MPs demanded they hand back millions of pounds in ‘rewards for failure’.
In a blistering exchange in the wake of the travel giant’s collapse, MPs accused executives of covering up the true state of the firm’s finances for almost a decade.
Former Thomas Cook chairman Frank Meysman was ordered to show more humility after bragging of having ‘20million happy customers’. one MP even questioned whether directors had broken the law by continuing to trade – and sell millions of holidays – while the company was effectively insolvent.
Five of Cook’s most senior managers appeared in public for the first time since the firm’s implosion last month resulted in the loss of up to 9,000 UK jobs. The last of 150,000 holidaymakers stranded abroad have now been flown home as part of Britain’s biggest ever peacetime repatriation.
Former Cook employees dressed in their uniforms attended the hearing of the Commons business committee along with customers whose holidays were ruined. Committee chairman Labour’s Rachel Reeves told Mr Meysman after he spoke of Cook’s ‘successes’: ‘I think you’re deluded about the business that you ran.
‘It has gone under because of the decisions made collectively by your management team. So when you point to the success, maybe you might want to have a little more humility?’
Committee member Stephen Kerr, Tory MP for Stirling, said: ‘The fact is this board was rewarded for failure. I would love to run my household in this way.’ Independent MP Antoinette Sandbach suggested executives had ‘potentially overstated’ the value of the company for years. She warned: ‘You are still required under UK law as a company director to ensure your business is not trading while insolvent.’
In his opening remarks, Cook’s Swiss chief executive Peter Fankhauser appeared shaken and remorseful, telling MPs he was ‘deeply sorry’ to staff and customers that he and colleagues ‘could not save this iconic brand’.
He said the 178-year-old company’s £1.7billion debt meant bosses were not able to transform the tour operator quickly enough to compete with nimble online rivals. The firm burned through £1.2billion in interest and refinancing costs on its debt since 2012. Mr Fankhauser, 59, who raked in £8.4million in pay and perks since he took the top job in 2014, refused to commit to handing any of it back when asked repeatedly by MPs. The committee pointed out that Cook’s directors had received £20million in bonuses in the past five years. Mr Fankhauser stressed that around £4million of his bonuses was paid in shares which were now worthless. But Miss Reeves told him: ‘The number of times you’ve said sorry...it just rings rather hollow when you’re not willing to put something back.’