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Raymond Doherty 15 Oct 2019 05:12pm

MPs slam Thomas Cook accounting

Thomas Cook bosses have been criticised for their executive pay and accounting practices in the lead up to the collapse of the travel business

Appearing on the opening day of the Business, Energy and Industrial Strategy (BEIS) Committee’s inquiry, executives at the world’s oldest travel company were accused of failing to write down goodwill and categorising special disclosed items in the financial accounts on items that were “anything but special”.

MPs questioned how Thomas Cook’s goodwill was worth “£2.5bn one minute and £1.5bn the next – and now worth nothing”.

Appearing before the cross-party MPs were Thomas Cook CEO Peter Fankhauser, former chair Frank Meysman, former CFO Sten Daugaard, former chair of the audit committee Martine Verluyten, and former chair of the remuneration committee, chartered accountant Warren Tucker.

In the coming weeks the committee will question auditors PwC and EY, the Financial Reporting Council (FRC) and the Insolvency Service.

Fankhauser said he was sorry for the collapse but that the reasons for it were "not one-sided".

He revealed that no UK government ministers were in direct contact with Thomas Cook in the six days before its collapse – but that ministers from five other countries had been in touch.

This prompted Labour to call for a “full public inquiry into the government’s handling of this scandal”.

Earlier his month the FRC announced a probe into the financial statements of Thomas Cook Group plc for the year ended 30 September 2018. EY has audited Thomas Cook for the last two years and was preceded by PwC.

 

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