Bosses and ministers blasted over Thomas Cook collapse

fOrMer thomas Cook bosses and Government ministers have been slammed by MPs for the travel operator’s collapse.

In a report rushed out before the election, the Business, energy and Industrial Strategy Committee detailed a ‘catalogue of failures’ that pushed the 178-year-old company into liquidation.

they blamed bosses for a ‘series of misjudgments’ that weakened thomas Cook, including confused business plans, piling up debt and risky decisions going unchallenged in the boardroom.

MPs also turned their fire on the Business Department and Business Secretary Andrea Leadsom for showing an ‘extraordinary lack of interest’ in thomas Cook ‘in the days and weeks leading up to the collapse’.

In a letter to committee chairman rachel reeves, which was released alongside the report, Leadsom said a Government rescue deal ‘would have been a very poor decision for the taxpayer’.

Leadsom added that although the total is unclear, the repatriation costs of bringing thomas Cook customers back from overseas are expected to be around £80m.

thomas Cook went bust in midSeptember after it failed to raise enough cash to refinance its debts in last-ditch talks. the collapse put 22,000 jobs at risk worldwide, including 9,000 in the UK.

Last month the House of Commons’ business committee grilled former thomas Cook bosses, including Peter fankhauser, who was at the helm when it failed, and his predecessors Manny fontenlaNovoa and Harriet Green.

reeves said: ‘During our inquiry, we’ve witnessed buck-passing and blame-shifting but precious little humility or reflection from those at the top of the business. Directors and senior management pocketed hefty sums in annual salaries and bonuses that thomas Cook staff will only have dreamed of earning throughout their entire careers.’

fankhauser, 59, said during committee hearings he would consider returning some of the £8m in pay and benefits he pocketed during his five years in charge.

MPs also slammed auditors for failing to challenge assumptions the company had made about the value of its brand in accounts. When this assumption was changed, shortly before the company went bust, it led to a £1bn charge.

the committee said: ‘It presents a picture of audit automatons that are incapable of drawing the most basic of conclusions from a balance sheet, questioning what they add to the corporate reporting process.’

Most of the recommendations MPs made in their report had already been passed to ministers before, but ‘have been sitting in the Government’s in-tray for months’.