BusinessBusiness RecoveryBDO and DTI to investigate Farepak collapse

BDO and DTI to investigate Farepak collapse

Loans made by Farepak to parent company to be probed by BDO, and DTI to look into company's collapse

BDO Stoy Hayward, Farepak’s receiver, is to look into the loans made through
Christmas hamper monies to parent company
European
Home Retail
, which may have caused the company’s collapse.

The Christmas club received about ?40m from 150 000 families and loaned ?17m
to its parent and sister companies by the time it went into administration, the
Financial Times reported.

The Department of Trade and Industry
will also investigate the collapse of the company, which may lead to
disqualification of directors or further action against the company or anyone
involved in running it.

EHR’s chairman, Sir Clive Thompson has come out accusing HBOS of ‘pulling the
plug’ on EHR.

The bank, however, has insisted it stood behind EHR when the company had
‘significant financial problems’.

The company’s auditors, Ernst & Young – who charged ?144 000 in audit
fees – raised no questions over whether Farepak or its parent, EHR, were likely
to continue as going concerns when it signed off accounts for the year ending
April 2005.

Further reading:

MP’s
urged to back Farepak fund

Suicide
linked to Farepak collapse

Farepak
director hides in his ?3m house

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