Economy,  Financial Services

The Grinches Who Stole Xmas

Although it is more than Fred Goodwin faced before he took umbrage at being  mistaken for the likes of Matthew Greenburugh, disqualification proceedings have been initiated against nine former directors of Farepak (including its former Chairman, Clive Thompson who also is a former president of the CBI).

Operating as a savings scheme for Xmas hampers, by late 2006 the company had some 100,000 customers saving an average of £400 each. In October 2006, it and its parent company, European Home Retail plc both went into administration after a backroom loan of £33 millions to EHR by Farepak was not returned: subsequent investigations revealed that a sales drive had been in action until just days before, with customers being encouraged to save even more for the opportunity to win additional hamper items.

An initial relief fund set-up by the Government promised savers as little as a 5p return for every pound, although was raised to 15p in 2010 after a settlement with former directors with no admission of liability.

What is rankling some financial observers is that one of the nine facing disqualification is the former finance director, Stevan Fowler who assumed the position only in January 2006.  His predescessor, Chris Hulland who was in place when the 2005 accounts were signed-off and fateful decisions about the loan to EHR appears to have escaped censure.

The former CEO, William Rollason who had permitted decisions by Hulland which have been linked to the eventual collapse also faces disqualification, although just has joined Bright Futures as a non-executive officer.

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