Thomas Cook Britain’s largest travel group ceased all its operations on 23rd September this year and effectively went into liquidation. It has also been revealed that former boss Manny Fontenla-Novoa had been paid a bonus of 5 million GBP by its audit firm known as EY. It had been heavily criticized for its merger with MyTravel Group in the year 2007.
Senior EY officials will appear before a panel of MPs who are currently investigating the collapse of the Thomas Cook group. The audit firm also faces an investigation from the Financial Reporting Council (FRC).
The collapse had taken away the jobs of more than 21,000 people worldwide and 9,000 in the UK. More than 600,000 people were stranded abroad globally in different destinations, 150,000 being from the UK. It triggered the largest peacetime repatriation in the history of the UK.
The company’s chief Peter Fankhauser had told the MPs last week that the company was involved in deep debts which had crossed 1.4 billion GBP in 2018. According to Fankhauser the company had paid more than 1.2 billion GBP in interest costs and refinancing costs. He further said that it would have been so much better if the company could invest even half of that amount into its business. He ended by saying that he regretted that he could not turn around the fortunes for the company and pay off its debt.
But according to former executives of Thomas Cook the trouble had started with the My Travel merger. The company took to extreme measures when it had asked its employees to sell off their holidays for paying the debt which is shocking. It was the year after the merger that Fontenla-Novoa received the hefty bonus under Thomas Cook’s ‘Secured Synergies Bonus Plan’. It was backed by improvement in negotiations with the overseas accommodation providers along with increased hotel settlement income.
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