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Thomas Cook heard nothing from UK ministers in six days before collapse

No British minister contacted Thomas Cook in the six days before it collapsed – despite calls from the German, Spanish, Bulgarian, Turkish and Greek governments.

The revelation was made by the firm’s bosses as they underwent a grilling by Parliament’s Business, Energy and Industrial Strategy Committee today. 

Former chairman Frank Meysman said the travel firm asked the UK Government for one of three options to save it from collapse.

The government Investment Unit met Thomas Cook representatives on September 16 and 17 to discuss potential funding, but said it would be difficult to bail them out due to state aid rules.

The company provided a formal proposal on September 17, six days before the company went into liquidation on September 23, MPs were told.

Committee chair Rachel Reeves said: ‘So you’re a British company and in the days leading up to the collapse of a British company you had conversations with five government ministers, but none of them British. Is that right?’

Former CEO Peter Fankhauser replied that it was correct, but that he was in ‘close contact’ with some government bodies.

Left to right today: Former Chair of Remuneration Committee at Thomas Cook, Warren Tucker; former CFO, Sten Daugaard; former CEO Peter Fankhauser; former chairman Frank Meysma and former Chair of Thomas Cook’s Audit Committee Martine Verluyten at the Business, Energy and Industrial Strategy Committee inquiry into the collapse of Thomas Cook

Earlier in the hearing, Mr Fankhauser told MPs he is ‘deeply sorry’ about failing to save the travel company – but has not decided whether to hand back his latest £750,000 bonus. 

The former travel firm boss told MPs: ‘I really want to repeat it in front of the members of the select committee, how deeply sorry we are that we couldn’t save this iconic brand and this company who has a long, long-standing history in this part of the UK industry.’

In an extraordinary moment Mr Fankhauser, who has taken home £8.4million since getting the top job at Thomas Cook in 2014, then admitted he had not even ‘considered’ handing back any of his bonus since the business went under.

He said that while he ‘fully understands’ the anger about his pay, he claimed he had ‘worked tirelessly’ to try to save the company during his five years as CEO.

In a tense exchange chairman Ms Reeves then asked him again: ‘How can he justify the bonus?’ – Fankhauser then replied: ‘I will take it back, and consider what is right, but I will not decide today’.

Peter Fankhauser said: 'I'm deeply sorry about this failure and I'm deeply sorry for the distress we caused' - but says he has not decided whether to hand back his bonus

Peter Fankhauser said: ‘I’m deeply sorry about this failure and I’m deeply sorry for the distress we caused’ – but says he has not decided whether to hand back his bonus

The company needed a huge government-organised rescue operation after it went under with thousands of holidaymakers still abroad

The company needed a huge government-organised rescue operation after it went under with thousands of holidaymakers still abroad

Questioning Mr Fankhauser in relation to his 2017 bonus worth more than half a million pounds in cash, Ms Reeves asked: ‘Do you think that that bonus should be paid back and maybe, if I could put it like this, be put to better purpose?

‘It could be used to pay the redundancy pay. It could be used to compensate taxpayers who are now bailing out the company which you guided, and you guided in the end onto the rocks, Mr Fankhauser.

‘Do you think that bonus should be paid back?’

Mr Fankhauser replied: ‘I fully understand the sentiment in the public and I understand the sentiment of some of our colleagues.

‘However, what I can say to that is that I worked tirelessly for the success of this company and I am deeply sorry that I was not able to secure the deal.

‘But it was not one-sided that I failed. There was multiple parties who had to contribute to the deal which finally then didn’t succeed.’

Ms Reeves shot back: ‘At the moment I’m afraid, Mr Fankhauser, the number of times you’ve said sorry, it just rings rather hollow when you’re not willing to put something back.’

Former Thomas Cook CEO Peter Fankhauser arrives for a business committee today

Former Thomas Cook CEO Peter Fankhauser arrives for a business committee today

Former Thomas Cook employees arrive at Parliament's Portcullis House this morning

Former Thomas Cook employees arrive at Parliament’s Portcullis House this morning

Hand back bonuses to cover pension fund, MPs urges bosses 

MP Frank Field has called on Thomas Cook’s executives to hand their bonuses over to cover the firm’s pension fund.

Former employees of the travel company face a ‘long wait’ to find out how much of their savings they may have lost.

Ex-employees want to hear how bosses explain the demise of the company they worked for

Ex-employees want to hear how bosses explain the demise of the company they worked for

The committee said that recent calculations show there will ‘not be enough to secure their earned retirement benefits in full’. 

Mr Field said: ‘Thomas Cook workers now face a long wait to find out exactly how much they’ve lost from their life savings, and, while their former bosses might argue that this isn’t another BHS, Carillion or British Steel, they will have a hard time justifying the millions they pocketed while the company collapsed around them.

‘If they’ve had a chance to check how their own pensions are affected, perhaps the high-paid executives responsible would like to bolster the retirement of some of the workers they left behind, and give some of it back?’

Mr Fankhauser had opened the hearing by apologising to Thomas Cook’s customers. 

He told the committee: ‘I’m deeply sorry about this failure and I’m deeply sorry for the distress we caused to millions of customers who booked holidays with us and who were on holidays with us.

‘I’m deeply sorry for our suppliers who were long-standing partners and who were loyal to us throughout this time.

‘I’m especially sorry for all my colleagues who worked extremely hard and tirelessly to make Thomas Cook a better company.’

Asked by committee chair Rachel Reeves if there was anything he should have done differently, Mr Fankhauser replied: ‘I’m generally a very reflective person and I have now had time to reflect what could I have done differently.

‘If I could start from scratch, then I would have probably even pushed more on the pace, but it was difficult for me to find the balance between pace and the money you need to transform such a big business at pace.’

Mr Fankhauser revealed he had received offers for parts of the business prior to its collapse.

He told MPs: ‘We could have sold part of it, we had offers for parts of it but none of them would have given enough value for the shareholders and stakeholders that they would have agreed on that.’ 

Bosses are being quizzed over the failed rescue of Thomas Cook, how the company was managed, its £1.7bn debt pile and executive pay.

The three chief executives who led the firm since 2007 raked in a total of more than £36m in pay and bonuses during their time in charge.

Fankhauser took home £8.4m after getting the top job in 2014. His predecessor Harriet Green, who ran the firm between 2012 and 2014, got £11m. And Manny Fontenla-Novoa, who saw the company’s share price drastically tumble under his leadership between 2007 and 2011, received £16.8m.

Thomas Cook heard nothing from UK ministers in six days before collapse

 

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