The first minister demanded the UK government launch an inquiry after it emerged the credit card clearing house E-Clear owed Scotland’s largest airline and tour operator more than £30 million when it collapsed last week for the want of £5m.
And yesterday it emerged that another travel firm run by E-clear’s owner had ceased trading this weekend.
An estimated 3,400 holidaymakers were stranded in Spain, Portugal, Cyprus and Egypt after booking flights with Flyglobespan when the parent group went into administration on Wednesday because of cash flow problems.
Unlike a further 1,100 people who had booked a full package holiday with Globespan, the majority were not covered by a protection scheme operated by the Air Travel Organisers’ Licence (ATOL).
Administrators Pricewaterhouse-Coopers have now revealed that the Cyprus-based company E-Clear, which handled the airline’s credit card bookings, owed it £34m.
The Sunday Herald understands that E-clear had extended the time taken to pass on money from Flyglobespan customers to the parent company from an average of five days to 80 in order to earn higher interest from it.
It also emerged that E-Clear’s chief executive, Elias Elia, had led a consortium which wished to buy a share of Globespan. Mr Elias is also chief executive of Allbury Travel,
which the Civil Aviation Authority confirmed this weekend had ceased operations.
Mr Salmond told BBC Scotland he believed there was a “case for a serious investigation by the UK Government’s Department of Business Regulation”.
He added it needed to look at “the negotiations and the financial structure of Globespan and if indeed money, as is claimed, was being withheld from the company making worse or perhaps even precipitating its cash flow crisis”.
Writing in today’s Sunday Herald, finance secretary John Swinney also called for a detailed probe into the role of E-Clear: “This is money that should have been in Globespan’s account ensuring the company could continue to do business. Instead, this Christmas, thousands of passengers have been left stranded across the world and 550 staff are looking for work.”
Mr Swinney said he had also written to Lord Adonis, the UK transport secretary, arguing for ATOL protection to be extended to flight only bookings.
After Flyglobespan went into administration, E-Clear said it would work with the administrators to “clarify and address the various complexities around the airline’s financial position, so that matters may be resolved as quickly as possible”.
Talks were also held on “a sustainable minimum fund for E-Clear to hold” and possible claims it may face from Flyglobespan customers.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article