A former boss of Thomas Cook, who presided over a major expansion, has denied saddling the firm with a debt pile that ultimately killed the business.
Manny Fontenla-Novoa, who ran the company from 2003 to 2011, told MPs investigating the firm’s collapse it was wrong to suggest that financial management during his tenure was responsible.
The business select committee had already heard Peter Fankhauser, who was in charge at the time of the travel firm’s demise, point the finger of blame over the troubled purchase of MyTravel in 2007.
The value of the business was later subject to a £1.1bn writedown.
In his evidence, Mr Fontenla-Novoa said the cost of servicing the Thomas Cook debt pile was “manageable” during his time in charge but the company’s position was complicated by events, including the 2008 financial crisis.
He insisted the 2010 merger with Co-op Travel was “profitable” and suggested his successors should have looked to dispose of assets earlier if they had believed the debt position was insurmountable.
Committee chair Rachel Reeves later rounded on those at the top of the company, suggesting no-one was taking responsibility for the failure and they were “passing the buck”.
She told the hearing: The problem is, everybody we have seen from Thomas Cook has blamed everybody apart from themselves. They never look at themselves and the decisions they’ve made and reflect on those.
“So it’s the volcanic ash, it’s the hot weather in the UK, it’s the depreciation of sterling, it’s the debt acquired by somebody else.
“It would be really, really good to see somebody from Thomas Cook say to your customers and your suppliers and your employees….we got it wrong.”
In her evidence Harriet Green, who ran the firm from 2012 to 2014, did admit there “clearly should have been” a different approach to goodwill – a measure of additional value – at the company.
Auditors have already told the committee they flagged concerns it was artificially high.
Ms Green said there was overall goodwill of £2.6bn when she started and this was “slightly less” when she left the business.
The figure was substantially written down in 2019 by £1.1bn.
She described her tenure as being dominated by a “huge wall of debt” and a business model that was “entirely out of sync with the industry”.
Earlier, officials from the Financial Reporting Council (FRC) told the MPs’ inquiry that had broad concerns about a conflict of interest between auditors and their clients.
Elizabeth Barrett, executive counsel and director of enforcement at the embattled regulator, admitted auditors had “lost objectivity” in the area of whether they should be seen as a client or “independent scrutiniser of management”.
The role of regulators and auditors has come under closer scrutiny since the collapse of Carillion and resulted in a string of recommendations to uphold standards and bolster trust in the audit process.
The Insolvency Service chief executive Dean Beale also revealed an £11m bill for fees paid to two firms appointed to assist the Official Receiver.
AlixPartners and KPMG had more than 300 staff between them working on the failure in the three weeks after the insolvency, he said.