Farepak boss sorry for collapse

13-11-2006

Farepak boss sorry for collapse
The managing director of collapsed Christmas savings club Farepak has apologised to the company's customers who have been left out of pocket after the firm went into administration last month.

Nick Gilodi-Johnson, whose father founded the Swindon-based hamper firm, said that his family were "very sorry" for the situation that had arisen and were "devastated" by the impact that it had had on families who had lost money through the savings scheme.

In a statement, Mr Gilodi-Johnson blamed the bankers of Farepak's parent group European Home Retail (EHR) for the collapse of the company, claiming that it was "ultimately forced into receivership" after the Halifax Bank of Scotland (HBOS) terminated a long-standing overdraft facility.

His comments were echoed by those of EHR chairman Sir Clive Thompson, who was quoted by the Sunday Telegraph as claiming that the firm's management had been "hung out to dry" by HBOS, an accusation denied by the bank.

"What has happened to Farepak and its customers is nothing short of a tragedy," said Mr Gilodi-Johnson.

"The business I ran was healthy and solid, but I am afraid that EHR - the overall group which owned it - was not so fortunate and despite our efforts to resolve the situation, it was ultimately forced into receivership after HBOS terminated its long-standing credit facility.

"I honestly thought there was a workable solution which would have safeguarded all our customers' money, but the bank did not agree," he added, stressing that he and his father had both felt "passionately" about he fact that Farepak had been able to help families through Christmas prior to its collapse.

"My family is very sorry that this whole situation has arisen and is devastated by the effect it has had on so many other families, " said Mr Gilodi-Johnson, who revealed that he would be making a donation to the emergency appeal established to help the thousands of households who have lost millions of pounds between them in the run up to Christmas, following Farepak's collapse.

Yesterday it emerged that Labour MP Jim Devine has asked a Commons select committee to question EHR chairman Sir Clive Thompson and its bankers about the collapse of Farepak, which was fiercely criticised by MPs during a parliamentary debate last week, when parliamentarians expressed concern that their constituents had been left out of pocket following the collapse of the savings scheme.

Amid contention about who is responsible for savers having lost the money that they invested in the company's hamper scheme, the Department for Trade and Industry (DTI) has also launched an investigation into the collapse of the firm.

However, despite the claims of Farepak's management, HBOS insists that it supported the company throughout and stressed that proposals put forward by the company to ring fence savers' money in light of the company's financial difficulties were "not serious".


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