11 YEARS ON AND NOTHING SEEMS TO HAVE CHANGED

11 YEARS ON AND NOTHING SEEMS TO HAVE CHANGED

In the last 2 days I have talked to 2 people who have had their holidays cancelled because they were booked with Thomas Cook Group Plc, which just recently entered Compulsory Liquidation and is now under the control of the Official Receiver.  One of them is a member of the Solar Solve Team.

They are going to have to wait for at least 6 weeks to get their money back and have the added frustration of trying to arrange an alternative holiday, if they can find one, that is affordable and assuming they have the necessary savings to pay for it until their refunds are received.

Another problem is the current short-term ‘supply and demand’ situation which is hiking the cost of alternative holidays over the next couple of months, significantly.

Both people are not very happy but they are realists and thankful that their families are not part of the 155,000 UK holidaymakers that were stuck overseas when the crisis began.  Thanks to a dedicated support service being provided by The Civil Aviation Authority to assist customers currently overseas and those in the UK with future bookings, at least the vast majority of Thomas Cook customers will be helped to return home at little or no extra cost to themselves and they have a source of relevant advice they can use.

This side the catastrophe seems to be going quite well, with a major disaster for customers being more-or-less avoided, which has to be good news.

It seems Thomas Cook collapsed as a result of structural mismanagement and poor choices because it couldn’t adapt. It also had huge debts and has had throughout a number of years of difficult trading.

The Financial Reporting Council confirmed on Tuesday morning it has started an investigation into the audit of the failed tour operator for its final full financial year (to the end of September 2018).

Thomas Cook’s auditors signed off the firm’s 2018 annual report as a going concern in October, indicating they thought Thomas Cook could survive another year. By now we know it could not.

More importantly as far as I am concerned personally, I used the header for this blog for a very good reason.

11 years ago, the 2008 crash was the greatest jolt to the global financial system in almost a century – it pushed the world’s banking system towards the edge of collapse. Within a few weeks in September 2008, Lehman Brothers, one of the world’s biggest financial institutions, went bankrupt after its auditors, who were paid $31m, had provided “window dressing” for Lehman’s risky financial structures.

At the time critics united to demand a reform of the accountancy profession.

Frustratingly, unbelievably and unacceptably, the same firm of international accountants that audited Lehman Brothers as being fit to continue trading are exactly the same firm that audited Thomas Cook.

How appalling is that??

JHL MBE SSL Co. Chairman